With the rental market still proving to be a good investment, for those looking to dip their toes into the world of property and becoming a landlord for the first time, it can be tough to distinguish exactly what type of property to invest in
We all know that for a rental property to be a good investment, you need to make sure the sums work. Will your rental income cover your running costs, mortgage if you have one, maintenance, insurances, and any other costs associated with becoming a landlord
? Making sure the numbers work for you before investing in a rental property is essential.
But what type of property should you be looking for?
This all depends on your finances and your circumstances. Do you have the time, experience, and skills needed to flip a property and turn a run-down building into something you can make money from when you rent it out? Or are you in the market for something that needs little to no work and is ready to rent out from the off?
Renovating a property that needs a lot of work can be rewarding but also expensive, especially for those costs that remain hidden until they’re not! Hidden costs, expenses, and uncovering bigger jobs than you factored for can lead to a rise in costs to put the problem right and a delay in the time it takes to complete the works. This isn’t ideal when you need to get a tenant into the property as quickly as possible. Especially if you aren’t undertaking the work yourself and are relying on contractors to finish the job at hand.
Buying a property that is already renovated
can seem ideal on paper. However, generally, they will be more expensive to buy due to the level of work that has already gone into making the property move-in ready. Things to check are the rental income in neighboring properties, transport links, the demographics of the local population, and crime rates. This all will help you to know what type of income you can expect and if the yield will be worth it for your investment.
Alternatively, looking off build could be the way forward. Investing in a property that isn’t yet built and ready to move can have its advantages. Not being able to see the property can make it hard to envision what it will look like when finished. But check for options such as Meriton Virtual Appointments
to help you get a better idea of what to expect when it is finished.
The pros to buying off-plan mean you may be able to get a better price than when the building is finished and also it may be possible to work with the contractor to get some changes such as internal fittings and decoration more to your standards than otherwise would be used.
Whatever option you look at, make sure to do your homework and your sums thoroughly and get some advice before investing to make sure you don’t end up losing your money and paying out more than you had bargained for!