Buy-to-let, or in other words, purchasing properties with an aim to enjoy lucrative rental yields continues to be an attractive investment option. However, if you are considering buying a new property and letting it or gaining more rental returns from an existing property, it is important to do things right.
Here are our top ten buy-to-let tips from property investing to being a good landlord.
Understand the market. Get acquainted with the risks and the benefits. Make sure buy-to-let is the investment you want.
Choose a promising neighbourhood.
This does not mean going on for the most expensive or cheapest properties. It means that you should buy in an area where people would like to live. Ask, which part of town has a special appeal, good transport links, schools for young families? Match the properties you can afford and want to buy with locations that people who would want to live in.
Cast a wider net.
Consider looking at properties that need improvement as such units can be bought for a better price and then done up to enhance appeal and add value.
Consider your target tenant.
Put yourself in the shoes of your target tenant. Who are they and what do they want? Are they students, young professionals or families?
Remember costs involved.
Do the math. What is your mortgage payment? Property investment comes with running costs such as mortgage payments and maintenance fees and must be factored in as they will eat into your return. Moreover, properties often need repairing and things can go wrong. If you do not have enough set aside to cover a major repair, do not invest yet.
How hands-on do you want to be?
Will you lease the rental yourself or get an agent to do so? The upside of leaving this to the agent is that he/she will deal with any problems and fixes that may arise. On the other hand, you can make more money by renting the property out yourself but this comes with having to deal with viewings on weekends and running around to get all paper work completed and advertising your property.
There will be void periods.
A time when you don’t have anyone in the property ca be a drag, so be prepared. Maintain it well and build a good relationship with your tenants.