Irrespective of your views of what COVID-19 will do to the Australian property market in the future, there's no doubting there's been changes in the market.
Any market change will open up opportunities as well as problems that need to be mitigated, so it's timely to conduct a review of your current situation to ensure you're maximising your position.
All properties should be reviewed - whether it's your home, a residential investment or a commercial property. But what exactly do you check or review your property against?
Property roles – looking over the results, review the role each property has in your portfolio. Is it to provide cash flow, is it to hold until the re-zoning allows for a higher yield, or is it time for a freshen up (even just a few rooms in your home) and then have the property revalued?
Property tasks – for each property, outline the tasks required to optimize the property. This could include reviewing the rental returns with your property manager, conducting maintenance, or calling your local council to check on development applications scheduled for your area.
Property visit – this is optional, but depending on how many properties you own and their locations, you may like to schedule in an annual visit. Your property manager should be conducting reviews either twice or three times per year, but you also have the right to view your own investment property as long as you give your tenants reasonable notice. Of course, if there's a State border in the way you'll need to wait a few weeks : - ).
Review your goals – do you really still need 10 properties to replace your income or is it only eight now that the rental returns have increased? Identify how close you are to your target, and how much progress have you made over the past 12 months.
Make your plans for the coming 12 months – given the performance of your existing portfolio (even if it's only one property), what is possible now? Do you need to focus on purchasing a cash flow property that will help you pay off your loans? Or are you now in a position to undertake a mini-project?
Consider structures and entities – if you are starting to build a portfolio, it may be time to speak to a good accountant with strong property knowledge who can advise you on the most appropriate entities to use for your next purchase.
Review the market – now that your goals are clear, use this information to decide what you need to buy, and where you will get the best pay-off for your efforts. Consider macro factors – for example, government policy or bank requirements (hello serviceability issues) – as well as local market indicators such as pricing and demographic changes.