In theory buying a property to rent it out should be a money spinner. The reality, though, is somewhat different. Unless you are cautious, realistic, and wise with your choice of property, you run a risk of losing money in the short-term.
With this in mind, we thought we would give you some valuable pointers as to how you can make the most money possible from your property. So, if you’re interested in getting involved in the buy-to-let market, read on.
We’ll take you through what you need to do before buying your property, how to find the best tenants, and much, much more. Here are our top tips…
Importance of location
When it comes to renting out property, there is nothing more important than location. Look for the areas that bring you the best yields, even if it’s not as close to you as you would like. You also need to consider finding a property in an area that has a strong rental market but has reasonable house prices. In some regions, you will pay a lot for a house, but the rental prices won’t match your mortgage payments.
Fixing up the property
Once you have found the right property, you will need to do some work to it. You will need to fund these improvements yourself, so make sure you have enough savings, or look into home improvement loans. At this point, it’s vital to start thinking about the type of tenant you want and adapting the house to fit their needs. For example, if you wish to rent to students, you might be better off turning a large bedroom into two smaller rooms. This way you can get an extra rental income each month. However, if you are renting to families, you should keep that large bedroom. Instead, concentrate on turning smaller rooms into something suitable for children.
Be a good landlord
If you are a bad landlord, you will soon pick up a reputation – and you will also lose tenants at a rapid rate. Make sure that you provide an excellent service, perform regular maintenance, and build up a relationship with them. Beautiful places are always popular, but your service has to be exceptional, too. Also, don’t turn up unannounced, and respect the privacy of your tenants.
Be careful with your money
As a landlord, you have a responsibility to make sure everything is in working order in your property. So, if you make any profit from your rent, make sure you aren’t spending it straight away. In fact, it’s always best to build up a substantial reserve. This way, if a boiler breaks down, you won’t be hit by an enormous cost to fix it. Responding to maintenance in a quick manner is vital, as tenants have a right to complain if you don’t. And, if you are scratching around trying to find the money to pay for it, there will be fallout.
So, there you have it. Try these simple tips and get the most out of your buy to let property. Check out the rest of our blog for more financial advice.
