If you are a property investor, you make many careful considerations when investing in property. Success requires wise business decisions and a sound understanding of the market. It is more than just spotting a unit ripe for renovation or watching your bank account fill up.

Landlords also face strict legal responsibilities. As your portfolio grows, you will want to protect yourself and your tenants from unexpected challenges. That means setting yourself up for success – and knowing when to call in the experts.
We have the inside word on how to lower risk when investing in property.

1. Invest in good landlord insurance

As a landlord, you have what lawyers refer to as a duty of care to provide a safe property. But did you know your responsibility kicks off the moment you open the place to the public? That means you are potentially liable for any injuries before the property has been leased, not just after tenants move in. A would-be resident who trips and falls during an inspection could be able to hit you up for compensation.
Protect yourself by taking out landlord insurance. Not only will this type of cover incorporate building insurance and your contents onsite, but it should also include public liability cover – usually up to around $10 million. You can normally claim the premiums on tax and it could provide financial peace of mind. Most financial brokers would have referral arrangements to get a better and competitive insurance policy through the channels.
Look for: competitive premiums that cover you for incidents relevant to your specific property needs.

2. Employ a professional to manage things

How hard can managing an investment property be? Well, quite hard, as it turns out. Besides the time and effort involved, landlords also need to comply with a host of regulations and stay abreast of any changes as they happen. Consider reducing your risk by engaging a professional property manager.
Your responsibilities are many and can easily be overlooked. For example, failing to lodge bonds with your state’s bond authority or provide accurate rent receipts could result in an appearance before a tenancy tribunal. There are strict rules around when you can inspect the property, how and when to give notice, and how promptly repairs need to be carried out.
Unless you are a seasoned landlord who knows all the rules and has time to meet the requirements, using a professional service could make life a whole lot easier – for you and your tenants.
Look for: an individual or team with experience managing properties like yours.

3. Do it by the book

Landlords’ financial obligations can be complex, and the rules around what you can and cannot claim are often changing. You will have a variety of different incomings and outgoings, positive or negative gearing to consider, and different expenses that may or may not be taxable.
A great accountant will take out the guesswork. They will help you understand and manage your requirements at tax time and maximise your potential earnings while keeping it all above board. Finance brokers are also closely working with referral partners such as accountants and financial planners that you may reach out to with confidence.
Look for: a tax professional who specialises in the ins and outs of investment property.

4. Make sure you have contingencies

Property investment is not wash-and-wear. You will be managing risk in many forms beyond your legal obligations.
Before you invest, make sure you have plans in place if things go awry. That means:
Knowing how much you can afford if interest rates go up;

Having enough capital to cover you when a property is empty;

Being able to address urgent repairs or maintenance upfront; and

Having an exit plan if you need to sell.

Being realistic about what you can manage will save heartache in the long run.
If you are in a position to invest in the first or next investment property, reach out to the local independent finance broker at ASA Mortgage Brokers for your investment loan and getting the best-suited solutions based on your circumstances.

To discuss your home loan needs, contact ASA Mortgage Brokers today to book your FREE consultation appointment.

The information is a compilation from various sources for your benefit and should not be relied upon instead of appropriate professional advice. This article is prepared based on general information. It does not consider individual financial objectives or needs and is not financial product advice, and the content quoted from ME Bank Blog.