Across Australia, the rental market is thriving as people think twice about buying their own homes and look to lease instead. If you're thinking about ways to diversify your portfolio and are looking for great income and long-term opportunities, this would be a great time for you to enter the rental market as an owner. What are some of the key things you have to bear in mind before you proceed, however?

The Fundamentals

The phrase "location, location, location" is well worn, but still has some application in the rental market. There are many different ways to look at this, however. The type of view that the property has is only a small part of the picture. You need to look at this from the point of view of the renter. Many people are going to be more concerned about the home's proximity to a place of employment, schools or transportation hubs. You won't want to be too close to a major highway or a railway line because of the noise and hubbub. You will also want to consider the proximity to shopping centres, cafes or restaurants. Take some time to immerse yourself in the neighbourhood to see if you get a good "feel" for it.

Market Forces

Pore over local magazines or surf the Internet to find out what people are willing to pay, or what the market will withstand as far as rent is concerned. At the same time, find out what types of construction are planned in the area, such as whether any large developments are going to be built in the foreseeable future and whether or not these will include apartment complexes or the like. This could definitely affect the yield that you're likely to get for your investment in the future.

Look at the Bigger Picture

Remember that the purchase and furnishing of a property is only part of the battle. You will need to have quite a large fund for unforeseen eventualities. You will also need to take out a good liability insurance coverage so that you will be protected from all risks once you own the property.

Get the Experts to Help

Don't underestimate the amount of work it will take to manage your rental property portfolio on an ongoing basis. It's a good idea to engage a competent property management company to take on a lot of this work. They will also be experienced at properly screening your new tenant applications, which can pay off very well in the long term, when done right.