Thursday, June 22, 2017

Principles Of Success In Buy-To-Let Investment: a Guide For Newcomers

Are you thinking about getting involved in the buy-to-let market? It’s a tempting scenario to scope out, for sure, but there are a few things you need to know before you take the plunge. Yes, investing in buy-to-let can be highly lucrative if you play the game right, but before you kick things off, you need to establish the rules.

With this in mind, we’re going to take a look at some of the principles of buy-to-let property investment. It’s a guide put together to newcomers to the scene, or those that are thinking that it might be a good route to take. Read on to find out more about the principles of buy-to-let success.

There are plenty of things you need to get your head around if you want to taste success in buying property of any kind, and the same principles remain whether you are buying a home, becoming a landlord, or taking on commercial property. The ability to spot an opportunity will take a while to learn, but there is plenty of information out there - as well as a raft of experts that are available to hire in almost every region of the country. So, the first thing to remember when it comes to buy-to-let properties is this: always do your homework. And here are some of the key areas you need to consider for your buy-to-let.
Amenities and infrastructure
The first thing to consider when looking for your first buy-to-let property is the facilities and infrastructure of the particular area you see as a potential purchase. But don’t make the mistake of focusing your search on locations with excellent infrastructures already. Look into public or private development plans, and see if new amenities are springing up in the locale. Also, find out what sort of people are moving into - and moving out of - the area. When states and the government decide to redevelop and regenerate an area, you will often find that you can pick up great deals and then raise your rental prices as the location becomes more popular.
Social demographics
You should also have an idea of who you want to rent your property to. There are pros and cons of every demographic, of course. Students tend to be easy to please, and you could maximise your term-time profits by creating single bedrooms out of big double or master rooms. On the other hand, you have to bear in mind that the property will be empty over the holiday periods, so you have to consider how you will manage to foot your bills. There’s the single, young professional market to consider, too. This demographic tends to want to live in bustling, exciting areas of town, which have excellent transport links for their daily commutes. But young professionals also tend to move on relatively quickly - you might have to keep marketing your property every six months or so. In this respect, one of the best demographics to go for is, without a doubt, young families. Parents want a secure and safe environment for their children and tend to want longer tenancy agreements. The only downside is that homes and apartments in popular areas with good schools and child-friendly amenities will always cost a lot initially. And you will need to charge your rent accordingly to ensure that you are profiting from your buy-to-let rather than losing money.

Employment statistics
It’s also important to learn about the local employment situation. When it comes to investing in buy-to-let homes or apartments, the general rule of thumb is that wherever there are high levels of employment, there are low levels of vacancies. And, to add a cherry on top, the rental rates you can charge tend to be a lot higher. Again, it’s worth keeping your ear to the ground on local development - perhaps you hear news of a major business starting up in the area, for example, or learn that a new road is being built that makes traveling to a major city a lot easier than it ever has been before. In either case, it should see the employment figures going up in the area over time, and it might be the right time to invest.
Landscape and scenery
No one likes living in areas that are dilapidated and run down, and as Vystal Property Group point out, it can often pay to invest in premium locations. But at the same time, buying property in leafy suburbs will come at a huge price - and can be risky when you are just starting out in the buy-to-let market. There are walking trails, country parks, and kid’s playgrounds to consider, too. Anything that lifts the appearance of an area by a significant margin is well worth investigating. But, as we mentioned before, the trick to a fruitful and profitable buy-to-let investment is to find sectors that are targeted for local regeneration projects, that turn an area in ill health into a thriving and attractive place to live. Not only will you be able to increase your return on investment in these scenarios, but you will also find that you can increase your rental prices year-on-year and turn over a more regular income.

Making a difference
As you can see from the principles listed above, there is a common theme to success in buy-to-let investment: it’s making a difference between the place that you buy and the property you rent out. Whether it’s a simple renovation, ‘fixer upper’ project, or due to local infrastructure improvements, the difference between your property on the day you buy it to when you start renting out needs to be significant. And in general terms, the bigger the difference, the higher rental prices you can charge, and the greater your ROI.
While investing in buy-to-let property is not rocket science, there is something of a learning curve. You should try and find help wherever possible, whether it’s doing your own research online or meeting up with other local property developers and investors. Good luck on your search and future in property investment!

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