Buying a property with the intention of letting it out requires a particular outlook. You will need to consider things from a different perspective than you would when looking to buy a home for yourself, although some considerations will be important across the board. Here is a quick guide for potential landlords who want to make a profit renting out their new place.
First, consider your goals
It’s important to be in the right frame of mind when you approach the property market, with set goals in mind, even if you aren’t totally sure where this new venture will take you. Do you only want to do this on a temporary basis, or could you see yourself as a landlord for the foreseeable future? Do you need to make a stable return on this, or can you afford to take more of a risk? How much money can you really justify putting into a rental property? These questions will need answers before you start.
Weigh up your financial options
There will be different options for most people looking at buying a property. If you have enough cash saved up, perhaps you can put down a deposit and even buy a property outright without any extra help. This may not be the case, however, so you will need to look at the best value mortgage rates and loan options. Make sure you also look at the current tax situation and what is expected to happen soon, given the economically and politically uncertain times we live in.
Look into current market trends
Within the property market, complex combinations of factors can influence buying trends. It’s important to have a good understanding of these so you can accurately predict what might happen in the near future and make appropriate decisions based on that. Maybe you will realise that buying to let is a bad idea right now, and a different investment could offer you a better return.
Location, location, location
The old saying really does prove itself to be true over and over again. The most up-and-coming areas may seem surprising now if you do your research, but you’ll be thankful a few years down the line if you manage to buy at the right time and see the value of your investment increase. Transport links to popular places, increased local investment and so on will mean that some relatively cheap areas today could be worth a lot more in five years or even less.
Don’t make rough estimates
If you expect to make a profit, don’t rely on random guesses to decide what the financial implications of your decisions might be. Instead, sit down and crunch the numbers, factoring in as many possible problems as possible. Try to calculate the point at which you would be better off not investing, and then weigh up how likely that scenario is.
Start off relatively safe
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