Buying property and letting it is a great way to make an additional income. Some people devote all their time to it and others just have it as a business on the side, but whichever option you choose there are always things you should take into consideration. Have a read of these 5 top tips and let us know if you can think of any other elements to consider.
This is something you have to think long and hard about and something you have to get absolutely right. If you spend too much at the initial buying stage and overextend yourself initially you’ll always be playing catch up. By all means you’ll want to get the best property that you possibly can, but if you go over budget at the beginning you may never dig yourself out of the hole. Getting the right budget in place takes careful financial planning on all aspects and is well worth doing properly.
When you become a landlord you need to get appropriate landlord insurance in place. Without this cover in place, you are not protected should any problems occur with your tenants and it could end up costing you a small fortune.
What kind of property you want to buy
In general, the best property to secure you the highest return on your investment is a single family dwelling. The reason behind this is that it’s much more likely to attract couples and families who have more chance of staying in the property for an extended period of time. Couples are most likely to be young professionals with the financial security to pay the rent on time which removes added stresses and strains on your part.
Think about your target tenants
We’ve already covered the best type of property to aim for, but another key consideration is who you’ll want in renting the house from you. Students are usually a prime choice for people in the industry to rent out to as they know they’ll be able to get guaranteed tenants year on year, but renting to students brings added problems. You may struggle to get the rent paid on time and the property could suffer potential damage. This may be covered in the bonds you take when they move in, but organising potential repairs can be time consuming and costly on your part. If you target it at young couples and families, put yourself in their shoes and ask yourself questions about local schools and potential job prospects in the area.
Do you want to do work on the property?
Buying a property cheaply to then do improvements is a great way to increase the amount of your investment, but there are added considerations. You’ll have to think whether you have the time and the means to do the work and whether you’ll be able to get planning permission. Make sure you assess the work involved fully before embarking on the project. Take advice from professionals, DIY disasters can be costly and the repair can off-set the additional value you sometimes place on a property by doing the work.
Another great benefit of acquiring properties to build your letting company business is that one day you may wish to sell. Selling your property will ensure a good return for the years of hard work you would have put in. If, for any reason you require a fast sale for your property you can always call on the services offered by companies who have made a business from buying houses. This removes all the stress of waiting on lender decisions as mortgage acquirement becomes a lot tougher.
Written by Allan Freeman, Comms Manager at www.webuyanyhouse.co.uk you can read more of Allan’s work on the news section at the ‘we buy any house’ website.