Investing money in the property market is a surefire way to make a great return on your spending. Whilst the market tends to fluctuate over time, you can always find ways to make money from property. One way in which many people are looking to make a stable profit is by renting out their property and becoming a landlord. Doing so is not easy but will make you an extra monthly income. There is a lot you can do when you are collecting a rent package every month from your tenants. If you have the money to do so then, investing in property is a strong move. Here to help you along the way is a guide to investing money in property.
Decide what you’re going to do with the property
Are you planning to rent out the property you buy or do you want to sell it? There is nothing worse than a house lying vacant and wasting your money. You will still have to pay for the upkeep and maintenance of the house, even if you are not making a return on the property. Before you even begin to look at houses, you should decide what your plan of action entails. Unless you want a home improvement project, your best bet is to rent out the property. The only way you could make a quick profit on a property that you’re not renting is by renovating the house for a quick sale.
Sometimes two cheap properties are better than one expensive property
When you are considering how to buy an investment property, you should think about what you can afford. It may be tempting to buy a city center house and wipe out all your savings, but where are you going to make a profit there? You might be better off buying two houses in a cheaper area for a larger return on your investment. When you have more than one property, you can make two lots of rent each month. It is likely that you will make more of a profit by doing this.
Think about the location of your property and who will live there
If you are buying a property to rent out then, you should think about who might want to live in that property. When you are looking at houses, try and get in the mindset of your future tenant. What are they looking for in a home? Where do they want to live? Where do they work? By answering these simple questions, you can save yourself a lot of hassle later. Talk to your realtor about which properties are the most-popular in the area.
Look into landlord insurance and third party companies
If you are planning to rent out the house then, you must look into landlord insurance. Renting out your property will make you a steady income, but at what cost? If something breaks or goes wrong in the home then, you have a legal responsibility to fix the issue. If you do not do so your tenant can withhold rent from you and may even take you to a small claims court. Look into insurance companies that offer landlord protection, as these will help you to cover the cost.
You may also want to look at third party companies, which will help you let the property and act as a middle-man. These companies will sort everything out for you. They will find your tenants and maintain the flat itself. This option means that you will have minimal involvement in the day to day running of the property. You will just receive money each month from the company. The one drawback of using an external company to manage your property is that they will take a cut of the rent. Usually this cut is about a third of the total rent fee.
Categories: Real Estate