Visiting the dentist often isn’t fun. You get poked and prodded, and there are plenty of uncomfortable situations, often followed by a list of work that needs to be done, closely followed by a decent-sized quote. A filling, for example, can cost $200. Despite the lack of enjoyment that stems from the dentist, a majority of Kiwis still happily show up, at least twice a year and have done so for most of their lives. Why? Because although the dentist isn’t fun, and although you can probably almost guarantee there’ll be follow-up work, the alternative is much worse. Leave your teeth for too long and you’ll be met with an even heftier bill or the possibility that your teeth can’t be repaired at all. No brainer then, right? A small amount of discomfort twice a year and a proactive approach to keeping everything in shape, or years of burying your head in the sand only to find that the problems can’t be fixed without sizable cost or pain? So here’s the real question then, if you’re prepared to do it for your teeth, why is your investment property different? Here’s how going to the dentist and owning an investment property have more in common than you might think.
1 – Good routines
Common questions when you go to the dentist include, how often do you brush your teeth? What kind of toothbrush do you use? Do you floss? There’s a reason for this of course, the better your routine with your teeth, the less damage that will happen them. The same can be asked of your investment property. Having a good routine with your investment property surrounding proactive maintenance means less damage later on in the piece. Create a plan of jobs that need to be done every year. Paint the fence, service the heat pump, service the garage door, make sure the insulation is still up to standard. All of these things, while they may be uncomfortable to start with, will help you prevent a build-up of bigger problems. Servicing a heat pump costs next to nothing, but replacing a heat pump is a bigger, more expensive problem.
2 – Creating a preventative approach
A dentist is the fence at the top of the hill, rather than the ambulance at the bottom, if you use them properly. When you visit the dentist regularly, they look at ways to improve the fence so nothing gets through and you don’t have to deal with issues further down the track. When you buy an investment property, you need to make sure that you build your fence as well. Often body corporates will generate a long term maintenance plan and this is exactly what you should be doing as a property investor. Make it reasonable and factor in absolutely everything that could need to be done. It’s better to be over-prepared than surprised when it all goes wrong! Factor in roof maintenance, exterior painting, any landscaping that needs to be done and of course any changes in legislation that are up-coming which will result in an outlay for you financially, such as heating and insulation.
3 – Medical insurance
It’s unsurprising to hear that the dentist can be expensive. That’s why a lot of people who know that they are going to use the dentist every year will include dental cover in their health insurance. Of course, everyone has house insurance, but that acts as the ambulance at the bottom of the hill. Remember, when you’re working on the fence at the top of the hill, you need a budget to build the fence. Create your own ‘medical insurance’ for your house by accounting between 5-10% of the rental income every year to a maintenance budget designed to fulfil the jobs in the long term maintenance plan. If you end up not needing to do some maintenance work that you thought you would have needed to, then leave the money in the fund – it’ll help soften the blow when unexpected maintenance arises seemingly out of nowhere!
4 – Expert care
You wouldn’t try and fix your own teeth. No one has ever had a great experience pulling out their own wisdom teeth or putting in their own fillings. It’s pretty difficult to look into your own mouth after all! Just like a dentist, a property manager is an expert in their field. Property managers are the dentists of the property investment world and can help you to easily create a good routine, a preventative approach to damage and loss, and can advise you on an appropriate level of ‘maintenance insurance’ to be putting aside for your home to make sure that your property is well catered for. Even if you don’t use a property manager, get a property manager through your investment portfolio once a year as a ‘health check.’ They’ll be able to give you a fresh set of eyes and a second opinion on what needs to be done, what can wait, and the overall health of your portfolio. It will help you keep in line with the market rent and needless to say, they’ll tell you the painful truths about things that you’ll need to watch out for, or what you could be doing better to ensure the overall health of your property.So you go to the dentist for your teeth, the doctor for your health, and to a property manager for your investment property.
For obligation free advice, and to find out how you can sharpen up your bite in the rental market, give us a call anytime on 04 381 8604 or email us.