Bricks and mortar have long been deemed a sound investment. If you operate in the real estate game, there are various avenues you can pursue. One of the most common ways to make money is to buy properties and then rent them out. By doing this, you can add to your portfolio, increase the value of the asset over a period of time, and generate an ongoing income. Buying to let may seem like a relatively simple way of creating profits, but it’s not a ticket to success. To reap the rewards, you have to make the right calls at the right time. If you’re looking to buy a house or an apartment to rent out, here are some key considerations to bear in mind before you become a landlord.
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Location
Location should be a priority for every search. Whether you’re looking for your forever home or you’re aiming to do a house up and then sell it on for a profit as quickly as possible, it’s always wise to consider the location carefully. Location is important for a number of reasons. When you’re buying a home in which you plan to live, the location will obviously need to satisfy your requirements and preferences. Perhaps you want to be close to work, you’re keen to be near to a particular school for the kids, or you’ve got family in a certain area, for example. When you’re buying to let, eliminate your own wish list and put yourself in a tenant’s shoes. Make sure the property you buy ticks the boxes on their list. The location of a rental property can affect its appeal, but it can also play an important role in determining its value. Some areas command premium prices purely due to the name of the neighborhood or the zip code.
When you’re searching for a rental property, focus on the target market. Are you aiming to attract families, young professionals, couples or students? Are you targeting an older tenant or are you hoping to appeal to graduates looking for their first home? Once you’ve determined your market, you can zone in on areas that are likely to attract the relevant tenant. If you’re searching for young professionals, for example, it’s best to stick to neighborhoods close to major cities and towns with good transport links and amenities like restaurants, shops, and cafes. If you’re opting for the family market, look for homes close to schools and public transport links.
Before you make a decision about the area in which you want to buy, take a look at rental prices, have a gander at what’s out there already and get in touch with agents to learn more about the local market.
The condition of the property
If you plan to rent out a house or an apartment, you’ll need to ensure that it meets certain safety regulations. If you’re toying with the idea of taking on a project or transforming a fixer-upper, make sure you’re aware of the level of work involved and the types of tasks that need undertaking. If you’re considering an old property, it’s best to seek expert advice from firms like Schemel-Tarrillion.com if there is a chance of lead exposure. If you have a tenant in your home, and the property doesn’t meet safety guidelines, you’ll be liable for illnesses or injuries. Many apartment blocks that were erected before 1980 contain lead, and chipped paintwork and damage caused by renovation work can result in severe health issues. It’s important to be aware of renovation work that is required to make the property safe and habitable, and also to have an idea of how much the project will cost in total. At all times, you need to ensure that the property is going to be a worthwhile investment. If you’re spending a fortune on redevelopment, this is going to eat into your profits, and it’s going to take a long time for you to make your money back. If you do plan to undertake extensive remodeling or redecoration, get some quotes and go through plans before you make any final decisions.
Cost
Investing in property can be hugely lucrative, but success is by no means a given. To make money, you have to choose the right property at the right price. Any investor should start a search with a budget in mind. The budget should reflect the location and the target tenant. There’s no point in snapping up a bargain in an area where nobody rents or buying a huge family home if you’re trying to tap into the young professional market. You need to find a property that represents value for money for you and a prospective tenant. Set a budget, think about the kind of home you want to buy, and then see what’s available. If you find options you like, create a shortlist, arrange some more viewings, and ask real estate agents about the flexibility of the price and the rental fee you could command. When you have the numbers in front of you, you can work out which properties make financial sense. If you’ve narrowed down your options, and you’re sure about the house or flat you want to go for, be prepared to negotiate. Unless there’s a lot of interest and competition, it’s often worth putting in a low offer and then biding your time. You can always increase the offer if it is rejected. If you’re new to the real estate game, it’s worth reading this article to get some last-minute tips before you sign on the dotted line https://www.huffingtonpost.com/pauline-paquin/why-real-estate-is-one-of_b_9223400.html. Always make sure you have a good idea of the rental value before you proceed.
Also Read
If you’re hoping to make money from real estate, you may be thinking about becoming a landlord. On paper, buying to let seems a very simple way of generating an income and increasing the value of your property portfolio, but it’s not always as straightforward as it appears. To enjoy success, you have to select properties very carefully. Hopefully, this guide will point you in the right direction.
