Investing in property is one of the most effective ways to increase your income, as the property market is a steady industry to enter and can offer you a variety of benefits.
Before making the decision to invest, you should always seek advice from property experts.
Property experts can help you work out whether you’re in a suitable position to purchase a property and can guide you through the investment process.
There are a number of considerations to take into account when deciding to invest. To help you determine if you are ready to delve into property investment, you should ask yourself the following questions.
Are your finances in order?
Before you even consider making any investment, you should always ensure you are in a stable financial position. If you’re unsure about your financial situation, you should calculate the capitalisation rate of a typical property you are interested in.
You should then multiply the capitalisation rate by 100 to help you establish your return on investment, and whether or not you are financially able.
If you are in a position to invest, you should then establish your payment method. You may have enough savings to invest in the property of your choice, or you may decide to take out a buy-to-let mortgage.
For the latter, you will need a significantly larger deposit than typical residential mortgages (usually around 25% of the cost price). If you have the capabilities to put up a larger deposit, then you are ready to invest.
Have you researched the property market?
Property investment can become complex, especially if you are just starting out. The best way to not complicate your investment is through research. Start by researching locations and particular tenants.
For example, if you’re looking to invest in student accommodation, you will want to focus on properties close to universities and central locations.
The best way to narrow down your search is by consulting with property investment experts, like RW Invest, who can work with you to find the perfect property. They specialise in buy-to-let investments for both student and residential properties within the north-west, where you can find some of the highest rental yields.
Can you take on landlord responsibilities?
Becoming a landlord is no walk in the park. In fact, the job comes with a wide range of responsibilities. This includes advertising your property and tenant screening.
The first of these tasks are vital to the success of your investment because if your property is not marketed successfully, you will limit tenant interest, which will ultimately reduce your profits.
Tenant screening is also equally important, as you must ensure you conduct thorough financial and background assessments on your potential tenants before any contracts are signed.
Another major part of taking on the role of a landlord is to administer regular maintenance and damage repairs. It is beneficial if you have experience with any of these tasks, although you can always delegate and hire a property manager to help out.
You should also welcome advice from property experts who have years’ worth of experience dealing with property management. They can help you with any potential landlord issues in the future.