With interest rates so low, many people are now turning to the property market to make a return on their savings. But very few people actually know how to navigate the buy-to-let market safely. The following is both advice and warnings for those looking to enter the rental market.
pixabay.comChoose A Great Area
Right now in the US there are several cities which are real up-and-comers. In Seattle, for instance, average home prices are rising at the rate of about 5 to 15 percent a year. In Portland, thanks to a thriving tech community, that number is even higher. Cities like these are the places that you’d ideally like to buy-to-let a second home. That’s because, as prices rise, rents also go up to match. In the first year, you might only make a few percent return on your investment by renting. But as the years go by, and rents continue to increase, you could see your return breaking out.
Investing in an up-and-coming area might require looking a little further away from home. You’ll have to do your research first too. The trick here is to identify places that have a sustainable economy. You don’t want to start investing in areas that are in a bubble. Find out what is driving the local economy and ask yourself, can it last?
Be More Hands-Off
Landlords like to be intimately involved in the process of who rents out their properties. And who can blame them? There are a lot of risks involved. But landlords themselves aren’t always the best people to do this. After all, they usually aren’t experts in the matter. Rental property managers, on the other hand, are. And, because of this, they’re able to ensure that renters actually cough up.
What’s more, they’re excellent at vetting potential tenants. Recently, there has been a spate of reports of nightmare tenants, ruining the livelihoods of landlords. Landlord Glenn Schofield got a shock when he finally managed to evict some nuisance tenants from his four bedroom property. The house was effectively destroyed. The toilet had been obliterated. The kitchen was ripped out. And there was paint splashed all over the walls.
Consider Your Target Tenant
Lastly, do a bit of research on your target tenant. Think about what your target tenant would like from your property. If it’s the student market you’re after, the property doesn’t have to be luxurious. You just have to make sure that it’s clean and offers the basics. If your target market is young professionals, you’ll need to upgrade the decor and facilities to match. Students might put up with doing the washing up, but young professionals with hectic schedules will want a dishwasher. Finally, if it’s the family market you want to attract, make sure there is plenty of storage. Families always seem to have no end of stuff and are always in need of somewhere to put it. Remember, tenants who are happy with the facilities are more likely to stay longer.
