In other words:
- Do you really know what it is going to cost you?
- Is it a suitable investment for you?
- Does it support your long term needs and goals?
Property investment is a business and must be treated like one. Whether residential or commercial, a new property investor is now 'in business.'
Not everyone is able to do this, because it's not in their nature to cope well with such things. Dealing with tenants requires many personal attributes such as communication skills, patience, a working knowledge of the law, sometimes a very firm style of personal approach, and so on.
For someone on wages, when a customer leaves without buying anything because of the staff's manner, or a lack of suitable product, there's no immediate consequence to the staff pay packets.
But for a property investor, having a prospective tenant decline to rent the property because of the property investor's manner, or because two windows are broken, there is an immediate consequence: no rental income, while the mortgage chews on.
Attention to detail is important. The pertinent laws often require many documents with precise items and language in them, especially with residential properties. NZ tenancy law is weighted in favour of tenants.
Some speculate the reason is that property investors are in business, so have a greater responsibility than tenants.
Recording everything is important: expenses for repairs and maintenance items, rent received and in what form (directly into a bank account, or cash/cheque), receipts for cash payments, matters to do with bonds (if changed) and so on.
Computers with appropriate software and an Internet connection can make these tasks easier. Daily access to the bank account to check rent payments have been received is a modern technology boon for property investors.
Like many businesses, most everything can be done on a DIY (Do It Yourself) basis, perhaps more so when only one or two properties are involved. DIY covers everything from purchasing the property, obtaining a tenant, doing repairs and maintenance, to filing a tax return.
Having one of these is a "must".
For more information on our tax residency service please contact Scott White at firstname.lastname@example.org or on 09-630-5222