Investing in property can prove to be extremely lucrative. However, it is not without its risks. Things such as bad tenants who won’t pay and mess up your house, falling house prices, and over-exposure can leave you in a worse position than before you invested. In order to be successful in property, you need to be aware of the risks, create a lot of mitigations, and plan your strategy. If you can get it all right, then you can become pretty affluent from property.
It is very important that you research the areas you want to invest in. It is probably wise if you look for up-and-coming areas which are only going to get more popular. Investigate things that are going to be upgraded or built in the area. These include transport links and infrastructure. New areas that are close to the city’s business area. Knowing what is near and what the area is like will give you an idea of the types of people that are most likely to rent from you. Urban areas are more likely to be high in demand. However, you really need to consider the area. Out of the city, you are probably not going to be able to charge as much per month.
When you start investing in the buy-to-let market, you are making long-term investments. So, ensure that the locations are still going to be popular in a decade or so. City centers are always a good bet.
It may even be feasible to buy development properties ready to be newly constructed, such as with Rockford Homes. However, ensure that the developer is has a clean track record and always check the small print. A credible developer will usually not ask for more than 30% as a maximum deposit before completion.
Have a Plan
Don’t try and buy up home after home. Start small and build up from there. A lot of people fail in property because they try and take on too much too fast, leaving them with debts they cannot pay. Create a strategy for buying, and do not buy too many homes in one area as you may well suffer from over-exposure by having too many loans in one area. You also need to develop a budget, as you need to know your finances if you want to succeed. Once you buy a property, you will need to budget for everything you need to spend on it. This includes all the legal fees, renovations, etc. So diversify the locations, grow over time, and budget appropriately.
You are probably going to need to recruit an agent. You may be able to manage a couple of homes yourself, but as your empire expands, and if you are still doing the day job, you will need help from the professional. So, you will need an agent to provide a full-time management service of your property assets. Choose someone who is able to negotiate great deals with developers and who can offer the best long-term support.