Top 5 Tips on Buying Your First Investment Property
There are a few things you should consider if you’re considering purchasing a buy-to-rent investment and becoming a first-time landlord. Below are the top five pointers to consider about before taking the plunge.
1. Make sure you know what you are doing - Make sure you comprehend the processes and lawful obligations involved in renting out your property. Not only you need to read about your tax obligations and understand how security deposits are handled, you also need to draw up a tenancy agreement.
2. Location, Site, Setting - It’s essential that you carefully consider the site of your rental property before investing. The location will influence the appeal of your property, and that in turn will impact the amount of rent you can charge. Consider your marked market – is the area primarily home to young families? If so, consider the closeness of the rental property to good local schools. If it’s a student area, try to find a rental investment that’s close to the main campus buildings. Also, are there good train and bus stops nearby as well as local facilities like shops and banks?
Location can also influence the amount you pay for landlord insurance. E.g. You’ll probably be charged more for your insurance policy if you live in a high crime area.
3. Conservation and Preservation - Ponder about how you’ll keep up the property. Do you have to call for help from a qualified person or do you have the cleverness to carry out work yourself? You’ll want to carry out regular maintenance checks at the property to observe that it meets all health and safety regulations. If you fail to sufficiently maintain the rental, you could be at risk of a negligence claim. Also, if the property isn’t in fine condition it may fail to supply you with an enough rental income.
4. Finding tenants - To endorse your property effectively is to guarantee it doesn’t sit vacant. For a charge, you could utilize a property management company to work on the entire tenant finding process for you. If you decide not to, make sure you carefully vet possible tenants and take the necessary references and deposits. Mainly, people look to the web to find rentals, so make sure to feature your property on all the major property websites.
5. Insurance - Landlord insurance is considered a must-have purchase for most buy-to-rent owners. It’s highly likely that a typical house insurance plan will not be adequate if your property is being rented to paying tenants.