If a property portfolio isn’t at a stage where the investor can diversify comfortably, there are still ways available to help minimise and spread the risk of their property investment/s.
This is best achieved by approved multiple tenancies.
While it can be a little tricky and costly to get approved and started, things like separate meterage for utilities like water, gas and electricity and then also the fire and safety measures that must be fully complied with, having multiple tenancies can really pay off in the long term.
For example, a house with a good floor plan could be split into two residences or a granny flat could be built in the back yard.
As for commercial – Commercial properties with suitable sizing could be split up into sections so that it could allow for multiple smaller businesses instead of just one.
By doing this the investor;
Can adjust the layout and sizing to suit business versatility
Have greater security of rental income as they’re not just relying on one tenant, but multiple
Are less vulnerable to economic conditions as it makes renting more affordable
Will find tenants easier as cheaper rent appeals to a wider range of businesses
Can increase rental income with more confidence
How does this work? Think of skyscrapers in your city.
Most of the time, all of the floors aren’t fully occupied by just the one business, they’re separated by suites, floors and levels which accommodate multiple businesses.
It’s a similar concept.
This is why a little creativity can go a long way.
Not only does that help with managing the investors’ wealth and their overall portfolio health, but it also looks more favourably in the eyes of lenders for future prospects of lending or additional leverage and financing for other deals.
Looking to sell, buy or lease? Click here to contact John
This information is of a general nature only and does not take into account your objectives, financial situation or needs. We are not financial, legal or tax advisers. You should seek appropriate professional advice specific to you before acting on this information.
