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What should I keep in mind before buying a rental property??

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Andrey Sokure

New Member
Please mention the tried and true steps that will guide property buyers to make their first investment in rental property.
 
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lookinginvest

Member
I think sometimes you need to work backwards, write down what your targets are then work backwards to achieve this. If you're looking for long-term income streams then the buy to let market would make sense. If you're looking for a greater level of capital growth then there are different opportunities. It is also worth calculating how far your finances will stretch when setting up your property portfolio.

Unless you know want you to achieve it is impossible to get there.
 
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PostBrexitInvestor

Member
Before actually investing in the property rental market I would do was much research as possible. Keep up-to-date with the latest market movements, tax changes, regulations and also follow the experts. This forum offers the perfect location to ask questions of those who have been there, done it and got the T-shirt.
 
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nmb

Well-Known Member
Do not rush into anything before you do extensive research. It can look fairly easy to make money when markets are flying high but when markets take a downturn that is where investment skills come into play. It is also worth noting that the most successful property investment gurus take a long-term view on their investments although they will obviously consider short-term movements and changing investment environments.
 
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Paul Baker

New Member
Keep in mind those thinks:
Firstly, decide what area you want to live in.
Set your budget properties in big cities are expensive
Time when you are start with property search
Estate agency

This are short bits you should keep in mind for for more you can check(moderated) (link)
 
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nmb

Well-Known Member
Never invest beyond your financial means - if you live by this rule you will always do okay.
 
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realdeals

Active Member
Choose an area which has a strong flow of potential tenants. This ensures you will always have a tenant and if there is heavy demand for you property it might allow you to push up the rent.
 
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Ahmmed Alomar

Member
Keep in mind those thinks:
Firstly, decide what area you want to live in.
Set your budget properties in big cities are expensive
Time when you are start with property search
Estate agency

This are short bits you should keep in mind for for more you can check(moderated) (link)
exactly........

turkey real estate
 
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ThatPropertyBlogger

New Member
Are you looking for an income? Or capital growth? Or both?
How long are planning on keeping the property for?
What do tenants look for in the area you are looking at?
How many bedrooms are the most popular?
What is the common void period in the area you are looking at?

And, probably most importantly:

Can you afford the mortgage if the property is vacant for a while and/or the tenant does not pay rent for an extended period?

Hope some of that helps!
 
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Longterminvestor

Administrator
When doing your rental calculations do you assume a vacant period each year to give you some headroom?
 
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Ben Kinder

New Member
Some landlords request 'no housing benefit' - but circumstances are not always black and white. I would consider the housing benefit tenants after meeting them, as the income is guaranteed - some people are genuinely going through a bad time and will respect your property just the same - but the rent payments are no risk to the landlord as housing benefit will always be paid on time.
 
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Longterminvestor

Administrator
Hi Ben,

You need to balance up housing benefit tenants against the guaranteed income as sometimes the local authority will not always pay the going market rate. If you have a property in an area which has low unemployment then you should have no problem letting out your property on the open market.
 
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InvestVince

New Member
Please mention the tried and true steps that will guide property buyers to make their first investment in rental property.
1) Location
‘There are three things that matter in property: location, location, location.’ , as the adage goes. You can change the property by refurbishing it but you cannot change its location.

2) Cash Flow positive
Research and consider whether the property has a ready pool of tenants who can pay for the rent you are asking for. Work out your NET rental yield, it is cash flow positive?

3) Entry price
"You made your profit in real estate not when you sell your property but when you buy it", as another adage goes. Consider whether your entry price is too high because even if there is capital appreciation when you sell it, your NET gains may not be positive or substantial after deducting all the interests, taxes and expenses.

4) Never fall in love
Never fall in love with your investment property. I have encountered cases in which owners of investment properties fell in love with their investment property such that when the time is right for the exit, they refuse to sell it.
 
J-Nevil

J-Nevil

Member
Location is always important and to add to other suggestions, I would recommend researching existing transport links and upcoming developments in your area. For example, in Brighton there are direct links to London, but the commute has been horrendous of late. However, there is a possibility of a new line being built to lessen the burden on commuter trains. This will no doubt attract more potential renters who work in London, but wish to live further afield. The line would also affect surrounding areas such as Lewes, Horsham.

Secondly, as other have mentioned, you must think about the kind of tenants you are wishing to attract and factor this into choosing your property. Do you want hard working professionals who are conscientious and rarely at home? These kinds of renters are more difficult to attract, so you will need to spend time looking for an aesthetically pleasing property and invest in higher quality appliances and furniture packages (moderated)

If you are looking to invest in a student town such as Bristol or Edinburgh, there will be no shortage of your people attending university to fill rooms. Yet, if you go down this route there are other considerations, such as potential lack of respect for the property. In this case, you won't need to invest to heavily in a pretty property or expensive furnishings. However, there will most likely other costs associated, such as repairs etc.
 
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menachem

New Member
You should also keep in mind the interest rates, landlord responsibilities and tax implication in buying rental property.
 
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royalkleb

New Member
If you're looking for a greater level of capital growth then there are different opportunities. It is also worth calculating how far your finances will stretch when setting up your property portfolio.
 
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zivakrealtygroup

New Member
I believe that you should occasionally work backward, writing down your goals and then working backward to attain them. The buy-to-let market makes sense if you're searching for long-term revenue sources. There are a variety of options available if you want to increase your capital growth. When putting together your property portfolio, it's also a good idea to consider how far your money will extend.

It is hard to reach where you want to go until you know what you want to achieve.
 
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