You might be tempted to invest in some stocks and shares. Perhaps, you’ve always fancied your chances on the Forex markets. Or maybe you’ve always had a hankering to invest in arts and antiques. Or you could take the plunge and dabble in property. Building a property portfolio takes effort and money, but do it well and you could find your retirement fund increasing rapidly. Take a look at why being a landlord can be financially savvy.
Buy Well
It’s all too easy to state that you need to buy the right properties for the right price. But, how do you do this. Forget about scouring the ‘up and coming’ places, or the ‘next big thing’. These locations tend to have been labelled this way for years, never to really become the established well to do areas that they long to be. Instead, check out locations that are more salubrious and have seen property price rises annually for at least the past five years. Doing this means that you will be certain of making a sound return on your investment. Places with lower crime rates, good schools and excellent transport links are also more appealing to those renters that you want to attract.
Consider the sort of tenants you want in your pads. Are you aiming for the young professional market or are young families more your clientele of choice? For the younger market, you need to find apartments that are in the thick of it, with plenty of cafe culture and transport links on the doorstep. These properties tend to be more expensive to buy, yet can also increase in value more rapidly. For those more family oriented properties, you’ll be looking to the suburbs and larger homes.
Vetting
As a landlord, you need to be vetting your tenants. You cannot secure the finest tenants, if you simply let out your pad to the first person that comes along. Instead, you need to protect your rent as much as possible. Companies like PropertyGuru provide lectures, seminars and courses, to help landlords and agents to get the most from their bricks and mortar. Securing the maximum rent is vital to make your foray into property a financial success.
Vet your potential tenants by asking for references from employers and previous landlords in the first instance. You need to ensure affordability rather than be stuck with a tenant who never pays their rent. This can cause financial ruin. Obtain insurances against forfeiture of rent, and make sure that you draw up a letting agreement that all parties sign.
If it does come to a point that rent is not paid, then you will need to know how to report unpaid rent to credit bureau so that you go through the proper channels and do not make any mistakes along the way that can jeopardize getting your money and your property back.
Look Overseas
If you want to be a hands off landlord, because you don’t fancy being phoned at 2 am in the morning with reports of a leaking boiler, then you will have to employ a property management firm to act as a landlord on your behalf. These specialists can ensure that your rent will be paid on time and they will carry out the necessary maintenance on your pad as and when it arises. You could also look overseas for your property portfolio. Short term lets on the continent and holiday lets can be lucrative as you can charge a premium if your dwellings are in tourist destinations. The UK property market is not overly buoyant at the moment whereas the French and Bulgarian equivalents are on the up. Buy at the right time and for the right price and you could have a goldmine on your hands.
Having a couple of properties funded by your savings can be financially astute. As long as the rent you charge covers the home loan you obtain, you may find that you spend next to nothing on keeping your pads over the years. Buy well, vet your tenants, and be in it for the long haul, and being a landlord could be the best decision that you ever make.
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