Should you only own properties close to where you live? It must be a great place to invest because you live there right? Knowing local property management businesses and tradespeople can be an advantage too. However, owning properties in several locations can reduce your risk by exposing you to property markets which are at different stages of the property cycle. Not only that, different locations are also exposed to different climate issues which must be considered in this day and age.

Speaking of location - managing a rental property out of town isn’t for the faint hearted I discovered talking to a client recently. Some things to consider are the substantial travel costs for inspections, time managing the exit and entry of tenants and getting the property up-to a reasonably standard of cleanliness between tenants. But the biggest issue I heard from the conversation was managing tradespeople.

One vital aspect of property investing I’ve learnt over the years is to hold a reasonable cash buffer. We recently had a client who needed to repair damage to their rental property driveway. Who has that sort of money just lying around in their bank account? A cash buffer can ease your stress and can provide necessary funds for minor renovations, a new roof or just to cover cashflow shortfalls.