Monday, June 12, 2017

A Landlord's Guide to Investment Properties

Buy-to-let can be an excellent choice for a lot of people. It brings in a steady, regular income and the mortgage will basically pay itself down, but it could be a risky investment unless you carefully consider the expenses that might occur when you’re a landlord. So, before you start looking at mortgages, do your research and make sure it pays off.

Weighing your options

Although it seems like an ideal investment at first glance, your money could perform better elsewhere. Take the return you’ll get from investing in funds, for example; where the value of an apartment or house might rise, you still need to pay tax on it if you want to sell. With the return from an investment in funds will save you money on tax and it’s a quick sell, making it less frightening to invest in it with all of your life savings. How long does it take to buy a house and how long does it take to buy a house are common questions and will help you with the choice.

Look at both options and consider if you’d prefer the responsibility of being a landlord and committing to a mortgage, or if the less personal option of investing in funds is better for you.

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Finding the right area

Buy-to-let is a popular option for many, and the responsibility of a landlord doesn’t have to be as daunting as it seems. The idea of investing in an actual place, which you can love and renovate as much as you like, is appealing to many; renovating your funds or savings account or proudly posting pictures of it on Facebook doesn’t sound like too much fun.

If you’ve decided that buy-to-let is the way to go, and know the limits to your budget, the next step is to find the ideal area to invest in. If a family is your type of tenants, it’s a good idea to look at somewhere with a garden patch or schools nearby; your student tenants, on the other hand, would much prefer to live close to a university. Look at the recent trends in real estate investments, too, to stay up to date.

Dealing with tenants

They’re the bane of most landlord’s life and could quickly become yours too without the proper research. First, consider what type of tenant you prefer: students, families or a young couple?

To find the right one, you should obviously look at those with a good credit record first. It just makes this investment a lot easier to handle, when you don’t need to nag your tenants for rent each month. Run a credit check as soon as you think you’ve found your perfect tenant - if their financial past is in order and their tenancy is smooth sailing from there on, you’ve saved yourself a lot of trouble already. Have a look at this article for a handy guide to finding the right one.

To avoid any complaints, you also need to look into the Fair Housing Act to prevent discrimination when choosing your tenant. This is obvious to most people and seems like common sense, but familiarise yourself with it nonetheless.

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