The number of landlords is rising exponentially. If you want to make some money and take on a project, it could be the solution for you.
Finding the Right Property
Your first priority should be finding a property that will appeal to tenants and provide a return on your investment. There are two main options you need to consider when buying a buy to let property. You might want to buy a property that is already in great shape and is fully furnished. This is the most expensive option, but it will take a lot of the work out of the process because you won’t have to do any repairs or redecorating.
Your other option is to buy a run-down or derelict property at a low price and do the renovation work. This is a good option because, if you can keep the renovation costs, there’s a high chance that you will have a large profit margin. Derelict properties can be bought for next to nothing if you know where to look for them. They’re most often found at property auctions. So, track down your nearest auction house and see what deals you can find if you want to take on a renovation job.
Finding the Right Tenant
Once the property is all ready to go, you need to find someone to move into it. Tenants are not hard to come by, but you need to make sure that you’re getting a tenant that’s right for you. Place adverts on any of the major websites where rental properties are listed – there’s plenty of them on the internet. Then, you just have to wait for the potential tenants to contact you. When they do, show them around the property and do a short interview with them.
This will allow you to get an idea of what kind of person they are. You want to avoid people who seem reckless or careless. For example, if they don’t show up for their viewing without providing an explanation, they’re probably not the kind of person you want to have for a tenant. It’s also important to get a few reference from landlords who have had them as tenants in the past. They’ll be able to tell you what they’re like as tenants.
Charging the Correct Rent
You can only make money on buy to let properties if you charge the right amount in rent each month. If you charge too much, you’ll price yourself out of the market, and if you charge too little, you’ll be missing out on a wealth of potential rental income. You should consult your lettings agent to find out what the average local rate is for properties similar to yours.
Rental yield is a vital concept to understand before you tip your toe into the water as a landlord. You want a rental yield of about 10%. This means you’ll get 10% of the overall amount that you spent on the property coming back to you in the form of rental income each calendar year.
The buy to let market is still booming, and it doesn’t look like going bust, so why not try your hand at it?