Many savvy property investors swear by the buy-to-let process. There is certainly money to be made with some investors boasting multi-million pound portfolios. However, it’s not a get-rich-quick scheme. Buying to let involves a long process of research and hard work. There are plenty of tricks needed to make good money from it. But, if you have the money to invest and willing to put in some effort, you’ll be richly rewarded.
We spoke to successful landlords and asked for their essential tips and advice. It turns out there are three or four vital considerations that will help you make money here. We’ve listed them here today in plenty of detail. The biggest trick of them all is research. Understand the property market and get a strong sense of the locations you plan to invest in. Let’s take a deeper look at the issues involved.
When it comes to the property market, location is everything. It affects the price you buy for. It affects your potential rental income and your eventual resale price. When we’re specifically looking at buying to let, it also affects your potential clientele. Before you jump into the sale process, think long and hard about what you want. If you want to target student renters, learn to understand the most popular student areas. Get a sense of potential rental income first. Also get a sense of where the neighbourhood is going in the future. Will it become more desirable, or less desirable over time?
Just like any investment, this process is all about the money. Securing a profit from renting isn’t guaranteed. The only way to ensure a good income is to set a strict budget that works and stick to it. First of all, find a bargain property and don’t pay over the odds. Get quotes for rental potential beforehand and work out the numbers before you buy. There are also plenty of hidden costs involved in renting. There are maintenance costs, landlord insurance and administration fees involved with renting property.
The next question to ask yourself is whether you’ll manage the property. This will involve being the first point of contact for your tenants. You’ll arrange any immediate maintenance and take on the responsibility for cleaning and repairs. Although you’re in control, it can be a huge drain on your time. This is one of the big mistakes made by those with multiple properties. The alternative is paying the letting agency to manage the tenants. This will cost you a little extra, but could be worth it.
Finally, you should have an exit plan before you even purchase the property. This may seem a little premature, but it is essential to give your investment direction. You wouldn’t invest in shares without a future plan. Your approach should be the same in property. A good understanding of the property market is key to planning an exit. It will help you decide when to buy and when to sell.
These are the bare essentials to get you thinking about buying property to rent. Take it from us, there’s plenty of money to made here. Keep these tips in mind and you’ll be well on your way!