With property prices rising year after year ever since the financial crash, more and more people decide to – or even have to – rent a property. With 23 million landlords and 112 million renters, this market is especially active and thus profitable, and there is no sign this will change in the near future. Property investments for rental purposes can be a great opportunity to boost personal finances and help achieve goals, both personal and professional. Of course, as with any business, you have to understand how it works and make the right decisions; but if you do so, you can enjoy a monthly cash flow that, in some cases, is even better than retirement.
Same rule for everyone: location, location, location
Buy-to-let is an investment scheme. Just like any investment, it requires care, wisdom and good judgment. First of all, you have to research the market where you want to play your game. Big scale landlords may buy properties across many states, but for a beginner, you should stick to physically close properties, so that you can be on site as and when you need to. This is why you have to choose your market wisely; areas that are slow or that don’t have much population that is looking to rent the kind of property you are offering could ruin your projections. Do your research about the closest cities with high prospects for buy-to-let investors, looking at figures such as average property price, the average income of the population, amount of new rentals per year and population flow.
Also, you should consider whether or not to conduct renovations on the properties that you buy. Some renovations increase the value of a property and/or make it more attractive and therefore competitive for potential tenants. Others, not so much. Especially at the beginning, when you are likely to have pending mortgages and not much capital left for cushioning unexpected losses and expenses, you have to be careful. In some cases, renting out a property without renovations could be the smart move. Making the right decisions as a landlord is a matter of experience, but you can get informed by reading reports and statistics from trustworthy sources.
Buy-to-let as an alternative financial scheme
Many people have reached success by purchasing properties and letting them; their cash flow increases and allows them to buy even more properties and multiply their income. The right decisions at the right time can provide more profit than a standard retirement scheme, but remember that being a successful landlord can be a lot of work. Do your homework, place your money carefully, and get ready to get your hands in the game.
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