Are You Too Emotional About Your Investment Property?
Owning an investment property is not as easy as it looks. Those beautifully laid out brochures can be a little misleading and the conversations around the BBQ with your neighbour who is now worth however many millions from investing in property probably never covered the nitty-gritty stuff. Purchasing a “rental” does not automatically guarantee “someone else is paying your mortgage” and the whole process can be incredibly stressful for some of us.
In Australia, the majority of property owners only have one or two investment properties in their portfolio and these are often bought to provide wealth in retirement. This is a great plan, but what is not always explained by Financial Advisors, is the emotional rollercoaster you can find yourself upon when you become an investor.
There are so many decisions to be made, rules to take into consideration (many of which you will never have heard of before), unexpected repairs and perhaps some costs you didn’t anticipate. And just when you get your head around all that, your tenant decides to move on and you have to start again or the legislation changes so there is a whole heap of different rules to take into consideration. It seems to never end. The one thing you can count on though when owning an investment property is that there will be ups and downs – it won’t always be a smooth ride.
The key to perhaps enjoying the “ride” a little more is to accept that things are always going to happen. Even if you don’t particularly like your tenant, the property will need to be maintained to a certain standard. Warranties on expensive appliances are going to expire and the chances are, those items will probably need replacing shortly after that happens (it’s always the way) Carpets are going to wear out, walls are going to need painting – you get the picture.
For those of us who have more of a connection with the investment property – perhaps it was a family home previously or you intend to move into it at some stage – you may find it more difficult to become a little less emotionally involved. This is only natural. Put things in place to reduce your anxiety. Recognising that potentially your tenants are not going to feel the same way about Grandma’s rose garden as you do and engaging a gardener to maintain them on a regular basis might just save you a whole heap of angst.
Owning an investment property is a great strategy for building wealth. If you can remove some of the emotion around decisions to be made, you will enjoy the process a whole lot more.