Even before Covid-19, lockdowns and social distancing hit our shores, income returns from residential investment properties were looking suspect.
Flat wage growth has limited the ability to raise residential rents. Not applicable in all property markets but as a general principle.
Meanwhile, costs such as rates, water rates, strata levies and land tax continue their relentless march north.
Then add Covid-19 to the mix.
Investors need to continually focus on cost efficiencies to maintain returns.
The linked articles below highlight one opportunity for cost efficiencies.
Professor Fels calls it the Loyalty Tax. I often refer to it as the Lazy Investor Levy.
Insurance companies rely on customers being lazy and not shopping around for a better deal. Investors who rely on their agents to renew their insurance are unlikely to be getting the best deal.
There are significant cost savings, particularly on landlord protection insurance. Your own insurance company will often offer you a better deal online than in your renewal notice.
In terms of cost savings, it is the ultimate low hanging fruit.
NSW regulator tackles $3.6b in hidden insurance fees
Lifting the lid on home insurance price gouging
July 2020
© PELEN 2020
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