The real estate market has historically
been one of the safest places to put your money, despite recent fluctuations.
When looked at over a long-term perspective, residential property can yield
profits on two different levels. Home owners can rent their property out as a
side source of income, before selling the property down the road at a profit.
However, there are several tips to keep in mind before investing.
Take your Time
Many first-time investors get carried
away in their eagerness to get started. It's important to take your time and
research all of your options carefully before you invest in real estate.
Talk to others who have successfully invested in residential property, read
forums, and learn more about different neighbourhoods. It's a buyer's market
out there, which means you have the time to find the right investment rather
than grasping at the first suitable property.
Search for Undervalued Property
The fundamental idea behind any
investment is to buy low and sell high. One of the best ways to ensure that
you'll make a tidy profit from your real estate investment is by seeking out
undervalued property. If you suspect a property is listed for less than what
it's worth, compare it to similar properties in the same neighbourhood to see
how the prices match up. Homes that have been on the market for a longer time
period may be reduced in price, which can lead you to a bargain. Don’t be
afraid to negotiate a lower price with the seller whenever possible.
Prepare for Property Management Costs
In addition to the cost of the property
itself, you can expect to pay some fees. Stamp duty and legal fees will be
costs incurred up front. Further fees to consider include the price of interest
on what you have borrowed, homeowner's insurance, and the cost of repairs. As a
landlord, you will be responsible for fixing faulty appliances and repairing
damages in the home. There may be additional marketing costs associated with
finding tenants, such as putting your listing up on a property finder
website or placing ads in your local newspaper.
Know Your Rights as a Landlord
If you plan on renting your property to
tenants, it pays to familiarize yourself with landlord and tenant rights. These
can vary depending on the state and city you live in. Use a legal professional
to draft your lease, which should clearly state all information pertaining to
late fees, rent charges, and deposits. This will protect you should there be any
legal dispute with a tenant.
Boost Property Value with Renovations
In addition to purchasing buy-to-rent
property, you can also look for houses or flats that can be renovated. By
putting in new kitchen features or upgrading the flooring, these properties can
then be sold at a higher price. Choose your renovations carefully to add value.
Modernizing kitchen and bathroom features are the most lucrative types of
repairs.
It's important to approach property
investment with time, research, and a cool head for the best results. By
keeping these tips in mind, you'll be sure to find a bargain with maximum
investment potential.
