Organise you finance before signing an agreement to minimise the conditions applicable. Allow the vendor to decide the settlement date so that it makes the agreement easy to accept.
When negotiating, always try to find out what the vendor wants. Give him this, but take back something valuable in return.
Set your purchase criteria. Put in lots of low offers. Eventually you will buy right.
Set a yield criteria for your property purchase.
Attach the cheque for the deposit to the agreement so that it is staring the vendor in the face when the agreement is presented to him.
Always insist on vacant possession so the tenant signs up on your terms and rules.
Use the services of a mortgage broker. These services are often free to you as the lender covers the costs. Often the broker will be able to negotiate a far better deal for you than you would be able to yourself.
Consider a revolving credit portion of your loan to give you flexibility.
Use the IR23B Alternative Tax Code application to improve your cash flow so that you don't have to wait for your tax refund.
Fixed interest rates reduce risk.
Include in the Tenancy Agreement wording to the effect that the tenant will cover water rates. This must be included to enable water rates to be charged. At present, you cannot legally recover waste water charges.
Keep accurate, complete and tidy tax records.
It is now a condition of the Residential Tenancies Act that the landlord be reasonably contactable. We believe that this may give rise to the opportunity to claim the cost of a mobile phone where property investment is undertaken as a business and a number of properties are owned.
Spread your investments. Target some properties with high yields and low potential for growth, and also target properties with lower yields and a higher potential for growth. A balanced portfolio is always a good idea.
Treat your tenants as your customers. They pay the bills. Respect their needs.
Join your local Property Investors Association, and learn from the experience of others.
Monitor the equity levels that you have in your rental properties when the mortgages come up for review. You may be able to extinguish securities held over your own home if the values of your rental properties alone fit the bank's lending criteria.
You make capital gain when you purchase, not when you sell.
Write your accountant a letter documenting your intention for the property at the time of acquisition. It provides evidence that could avoid you being classed as a trader.
Make your investment property loan interest-only if you still have a mortgage on your own home. This allows you to repay your non-deductible interest first.
Use your legal and accounting advisers. Always consult them before a decision, not after.
If you don't enjoy being a 'landlord', use a property manager.
Keep a long-term view.
Always maximise your depreciation claims by having your chattels valued.
Consider transferring profitable properties to trusts.
Be nice to your tenants. Give them gifts. They will be nice to you in return.
Always respond quickly to a tenant's request.
Review your rates, both up and down.
Consider using flexible investment structures like a LAQC.
