We are all aware of the level of commitment involved in buying a home. Your first house purchase is undoubtedly going to be the largest amount of money that you have ever spent before. Needless to say, it can be both scary and exciting all the same time but do it right, and you should have the perfect foundations upon which to build a property portfolio in the future. Indeed if you are lucky (or careful) enough that you have some spare capital lying around then you could do much worse than investing in the property market. Whether you are looking to upsize and expand your current living space or maybe buy to let, purchasing property is still one of the canniest investments that you can ever make.
Sure, you could take the money and buy some company shares, try your hand at short-term trading on the stock market but in reality, to do this would be a risk that you may not be prepared to take. Put your money into a well-considered property purchase and it is unlikely that you will lose and you could see a commendable return in the years to come.
Indeed, many aspiring property tycoons choose to invest their hard-earned cash into the buy to let market, in the hope of making a long-term profit. Whether you want to embark on it as a business venture or create a small but perfectly formed property portfolio to sell on at a later date, the buying process remains the same. Long-term profits are an attractive incentive to anyone, none more so than to parents of young children who one day will not only incur hefty college fees but will also need somewhere to live themselves. What could be a better proposition than renting your own property out to your children and their student friends during the college years? Not only would you have peace of mind that they are living somewhere respectable, but you could also keep an eye on them too.
For now though, once you have decided to pursue the buy to let option, the main consideration is which property you should buy. You may not be in a position to aspire to the latest of plush new residential properties such as those found in the new condo launch in Singapore’s Robertson Quay, but you do still have some important decisions to make.
Probably one of the first and most important decision will be the location of your new property. If you are looking to buy a small family home, you need to ask yourself are there good schools in the vicinity? What sort of amenities are close by, are there any local shops and how are the transport links in the area. The type of tenant that you are hoping to attract will govern just what your priorities should be when choosing a prospective home for them. Families with young children may like access to a park or countryside, a quieter residential area away from dangerous traffic where children can play safely.
The location is equally important to you, as the landlord. Do you intend to be hands-on and visit and maintain the property yourself? If so, then the nearer you live to the property the better. Or maybe you plan to recruit a property management firm to oversee and manage the property on your behalf. In this scenario, the location in relation to where you live becomes less important.
Do your research
If you are to succeed in the buy to let game, it is vital that you do your homework in the early stages before purchasing a potential rental property.
Of course, you will have carried out all of the mandatory surveys and building inspections but be sure to consider the whole picture including the surrounding area before signing on the dotted line. Is the area frequently affected by flooding or is it on a dangerous stretch of road where it could incur damage from passing traffic? Ask yourself these and other questions to minimise the risk of unexpected works and expense.
Once you have bought your property and are in a position to begin to market it, you will need to make it as desirable as possible to your target tenants. You should by now have decided just what type of tenants you are hoping to attract. A young family, as we have already seen, will place a lot of store in the proximity of your property to good local schools. Similarly, students will only want to rent rooms within a reasonable distance from their college or university, ideally without the need to use public transport.
Desirability also covers the aesthetics of your property. A young professional will be put off if the decor is dated and shabby, so be sure to spruce it up before you put it on the rental market. You will be amazed at what a difference a lick of paint and a good clean can make. If you are refurbishing, try and use modern and contemporary fixtures and fittings which will appeal to most tastes and avoid fuss and frills at all costs!
Return on your investment
When you have secured your buy to let it is safe to say that the majority of financial return, in the short term at least, will come from the monthly rent you will receive from your tenants. Buying in an up and coming neighbourhood should ensure that as time goes on you will be able to increase the rent as the area is developed. To get an idea of current rents take a look at other properties in the vicinity to see what they are being let out for.
With all of this preparation, all that is left to do now is to take the plunge. Find the right property for you, put your money down and you should start reaping the benefits from your investment by the end of the month!