Real estate market and renting in particular are usually perceived as an attractive opportunity to acquire a fortune. Because of the constantly increasing housing demand, there is rising number of first-time landlords. On the other hand, many people choose to lend their property because they cannot sell it, while moving house is on the agenda.
Whether you are planning relocation or you want to use it as your primary source of funds, buying-to-let is completely different from homeownership. Property investment should be approached as a business, rather than as a personal affair. The economic uncertainty and the fickle real estate marketing make buy-to-let practices quite risky. Although, it is difficult to predict the future trends in this area, here are a couple of tips for the novices.
- Find Out If You Are A Landlord Material
Forget about the “get rich quick” scheme. Being a landlord is more than just renting a property. You need to deal with different types of people. Some of them will be pleasant, other may be difficult. Can you confront the rogue tenants? In order to be a successful landlord you need to have good social skills, patience, understanding and some confidence. You need to find the balance between being too understanding and too rigid. If this is not you, then you may reconsider your decision.
- Know Your Market
Before taking any major actions, you need to research the market you are planning to enter. Get familiar with both the risks and benefits. Ensure that this is the right investment for you. Your money may perform better in another sector. Knowing your market will help you choose the right type of property for your specific area. Think from the point of view of a potential tenant. Pick a place with local amenities and good transport links. What are looking in a spot when you are moving house? Find out what are the most preferred neighborhoods for buy –to –let. The key is to much the type of property you can afford with the locations in which people want to live there. You can consider hiring an experienced letting agent.
- Do The Math
Buying a property is a costly investment. Before looking for an estate, you need to evaluate your finances. What type of property you can afford and what rent can you get for it? In most of the cases you will need a loan to fund your investment. If you are not familiar with the mortgage rates, it is better to consult with a professional. Usually the rent should cover 125% mortgage repayments. Don’t forget to include the maintenance costs in your estimation. Consider also you loss if the property stays empty for month or two.
When you go for your mortgage, don’t simply go in the bank and ask for it. Ask the advice of an independent broker. They can walk you through the details and help you find the right option for you.
- Recognize Your Legal Obligations and Responsibilities
