Four Ways to Get the Most Out of a Property Portfolio
With the uncertainty of global financial markets, investing for the future has never been more important. Developing a portfolio of income properties can ensure residual income for your future and that of your children. Following are tips to maximize your investment dollar and ensure sound retirement income with minimal effort:
Make Sure the Tenants Pay the Mortgage: The rental income should be high enough to cover the monthly costs but low enough to be competitive. Closely inspect the income and weigh that against the potential expenses. Taxes, mortgage, hydro, maintenance and heating costs all take away from potential profits, so it is important to balance any potential profits against the expenses.
Take Surplus Income and Pay Down the Mortgage: This investment strategy offers a plan for residual income. By paying down the mortgage you can reduce the time it takes to pay the mortgage and speed up your retirement date. Surplus income can come from a variety of sources.
Create a Reserve Fund for Unexpected Expenses: Part of your monthly income should be set aside to deal with large or unexpected expenses. Planning ahead for big-ticket items will save money down the road.
Know Your Comfort Level: Because this is part of your retirement consideration, your level of commitment needs to be measured. If you are planning to travel extensively or want a leisurely retirement existence, then a property management company may need to be part of your monthly expenses. Such companies can offer piece of mind with your retirement investment income.