Investing in properties can offer great opportunities, especially when the interest rate is low and you are looking for a way to gain optimum return on your initial investment. If you invest in a property in the right area, you could earn a stable rental income and then sell the property when you want to liquefy your money. Buy to rent is a realistic option for investors. The following tips will help you if you decide the option is the right one for you.
Before you do anything else you should research the market and make sure the property sector is really the right area for investing your funds. You’ll need to get an idea of the risks you’ll face, as well as the benefits and the other alternatives. Properties are unique in that you can purchase them, take out a mortgage and invest in improving them, giving you the chance to increase your returns greatly, but forward planning is vital if you want to succeed.
Choosing an area is one of the most important decisions you can make. You’ll need to decide whether to go in at the top of the market and choose a location where you know prices are stable or invest in an up and coming area where the rewards could be great. Spotting growth areas early is not easy but is really rewarding when you get it right.
Looking at your finances is important to see what your budget is and what you can afford. On top of this you’ll want to do some calculations and look at the kind of rental fees you’ll need to make a profit. To do this you need to calculate your mortgage payments, add in other fees and decide what extra you want to add for profits. Commonly people settle on 125% of their mortgage expenses.
Shopping around for the best mortgage is essential and will help you to get the best returns for your property. Many people make the mistake of not searching for deals and getting advice before they rush into a commitment. This could leave you facing a more costly investment and requiring higher rental fees to cover it.
Whenever you rent a property you should consider your target tenant, what they will require and how you can reach them. Making sure you meet their needs will ensure your property is snapped up quickly and making you the yield you want. Remember different groups of people have different needs so you’ll need to decide whether you’re targeting families, your professionals, students or other groups.
When you buy a property with the intention of letting you have a great deal of buying power. The fact that you will not be part of a chain means you’ll be more attractive to the seller because they can get the deal done quickly. This flexibility and freedom means you can negotiate and find the right bargain.
Once you complete the purchase you’ll need to decide how hands on you want to be. Some people like to manage properties themselves whereas others see the advantages of hiring a specialist to do it for them. If the property is in your local area you’ll have more opportunities to keep an eye on it yourself. Working with a management company offers many benefits. We specialise in property, block and estate management in Richmond Upon Thames and all other areas of London, and can help you throughout the entire process, from deciding which area you want to buy in to carrying out repairs and maintenance.