Part 5. How to treat property investments like a business - Refine and Repeat

This is the last of our series on how to treat your real estate investments like a business.

Step 10. Protect your down side

Protecting your assets is an essential part of being a successful property investor. You should always make sure you formalise your rental agreements and comply with all state and territory requirements. Even when renting to friends and family this is essential. The last thing you want is for a dispute to break down your relationship and formalising agreements is an easy way to give you clear answers when issues arise.

In addition to this, you'll also want to make sure your assets are fully insured. An insurance broker can run you through what you need and help you identify the best policies. Below are some of the insurances you will need in place when you start renting your property:

Building and Contents Insurance - Hopefully you already have this one in place. It's pretty well known so we won't go into detail about it but effectively it's to cover unexpected events and non-tenant factors which may damage the property. Make sure you check when you need to start this cover as it differs from state to state.

Landlord Insurance - covers tenant related risks such as damage to your property and loss of rental income. While you can minimise these risks by carefully selecting tenants, you'll still definitely want this one in place.

Public Liability Insurance - this is to cover legal expenses if an incident occurs on your property. It's often included in landlord insurance policies.

Step 11. Keep learning

I know we covered this one at the start but this is a reminder that your education doesn’t stop after you buy that first property. Continual learning is key to increasing your returns. The more you learn, the better your returns are likely to be.
A great way to increase your knowledge is to surrounding yourself with experienced investors and industry professionals. There are great property investor groups and forums around so it's definitely worth getting involved in these. They will often also hold local meet ups which is an excellent way to gain knowledge and stay motivated. 

Step 12. Don't stop at one

My final piece of advice is to keep going. The majority of realestate investors in Australia stop at one investment property. Unfortunately I believe part of the reason for this is that they haven't followed the above advice which has led to costly mistakes, like buying in the wrong area or becoming disheartened with the amount of time and money they have to put into their investment.

But the thing is, once you've gone through the experience of researching, purchasing and managing an investment property the first time, you've already done most of the hard work. The second time round is so much easier. You've already made mistakes and learned from them, built contacts, and navigated the process and gained valuable knowledge. The second time round you're just fine tuning your method. There are very few things in life that you get exactly right the first time and property investing is no exception. So keep at it and keep chasing your goals, you'll be amazed at the progress you can make when you just keep going.