Buying a property to let out is becoming one of the quickest-growing ways to invest your money in the current market. If you have wanted to place your cash into something that is financially secure, this may not be the route for you; it’s a sort of fall-or-fly conundrum, and you can either thrive within it or crash hard. However, if you keep your mind-set on the goal and take more than just a few factors into account, you are more likely to succeed.
Research Before Buying
Look at what is available to you on the market. Compare and contrast prices that you would pay for your ideal buy (for example, a two-bedroom apartment) and see how the prices differ from one area to another. While looking, keep in mind other offers that spring up; if you had initially set out to get one type of living space, don’t rule out others that appear to be bargains too. But remember – if something seems too good to be true, it probably is. Houses do not sell for much less than what they are worth, and if they are then there is something dodgy either with the seller or the house itself.
Make Sure the Area will Return Your Investment
It’s no surprise that better areas of living will demand higher rent prices. If a tenant feels safe and secure within their home, and if local amenities such as shops and schools are available to them, there will always be somebody willing to move in to your property. Don’t just think about the here-and-now when thinking about a return on your investment; later on, it’s worth taking into consideration whether your property will sell for more a higher profit. Even if you don’t sell it, the equity behind it can contribute towards further real estate investments.
Put Yourself in Their Shoes
Everybody has an ideal tenant in their mind, but you need to really hone in on their demographics to be able to get them to come to you. Different people have different styles, and whereas your home might be simple enough for the tastes and needs of, say, a student, it may not be suitable for a family. It’s also worth considering whether the space will need to be furnished or not, and whether that is a sound investment or a useless one; again, with students it may be appreciated, but with an established family they probably have their own bits and pieces that they have accumulated across the years, making yours essentially redundant (until the next tenants move in and may want to take it). Keeping the property user-friendly is a must, and ensuring that the tenants know that they are allowed to “make a house a home” could be the difference in them staying 6 months or 6 years; if somebody knows that they can make their space personal to them, they are more likely to want to carry on the tenancy.
Do-Up Properties; A Good Investment of Money but Not Time
If you are looking at purchasing a property to renovate, take into consideration the time-scale of when you wanted to be letting it out and how long it will take the work to be done. It can work out as a really good investment of your money as the property value will only increase with the work that you’re doing on it. WIth that in mind, there are other factors to consider with it, like putting in more money than you could get as a return and setting your sights on things which are out of your reach in term of how much input you can provide; you may have to outsource some contract work to get the job done (examples can be found at http://www.schemel-tarrillion.com/) or leave certain jobs until a later date, pushing back the goal that you had set out in the first place. Can you afford the initial outset of payments, or will this impact on your finances more than you wished?
Use an Agent or Going Alone?
It is pretty standard knowledge that using a real estate agent is probably the safer bet when it comes to dealing with issues of renting. Although they will take a fee, consider whether it is worth it to you; it will free up more of your time, main issues will go through them and everything would be (should be!) above board. They sort out all of the paperwork and the legal side for you, and you can usually get your insurance into place through them too. If you decide to go it alone, make sure that you know all the pros and cons of being a landlord – cover your back and triple check that you are doing everything the way it should be done. If not, it could cost you in the long run.
Know What’s Expected of You
As the owner of a property, you have certain criteria to meet. You need to make sure that the tenant’s home is livable, that it has had all of the necessary boxes ticked (plumbing checks including boiler services, electrical safety checks and certain insurances covered) and that it is up to scratch on standard; if you wouldn’t consider living in your property, why would anybody else?
Essentially, it can take a lot to start up your own little monopoly of properties. When you start off with one, you want to make sure that you gain a reputation for it being good value, but without selling yourself. There are a lot of points to take into consideration when starting off, but good research will not abate your progress at all – in fact, quite the opposite, as you will have a clear path as to how to get your property up and running and out on the market. If you establish yourself as a landlord who listens, cares and is available to fix a problem at a moment’s notice, the rest will take care of itself.
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