- 13 September 2021
- Posted by: admin_gray
- Category: Property
Written by Sapphire of the Savvy Women Group.
Finding the right rental property is certainly one of the keys to succeeding with investment rental property. At Savvy Women Group, we have created a guide to help you get started in finding the right property that will help you to generate additional income.
How much time/energy/cost do you want to put into the process?
First, consider whether you want to look for rental property on your own or whether you wish to use a broker to assist you in the process.
Advantages of working with a reputable broker when looking for investment property:
In many cases, brokers may know of properties which have just come on the market,and which may not have been noticed by others yet.
A broker is also usually well versed about the local neighborhood, which can be important if you are not from that area.
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Before you actually begin looking at prospective properties, make sure that you have gone through your finances and have them in order.
Ideally, you should check your credit report several months before you plan to make a purchase so you can be certain that there are not any inaccuracies, which could prevent you from obtaining a mortgage for the purchase of your investment property.
Check with at least three credit reference agencies, not just one, to get a clear picture of your credit standing. Assuring that your credit is in order can also help you to obtain a more favorable interest rate.
Research: What to look for
It is important to do your research about the local market so that you do not overpay for the property you ultimately purchase.
When you do purchase a piece of investment property, you need to make sure that the deal you strike allows sufficient room for a profit margin just in case there are times when you do not have a full occupancy.
On august 9th 2021, In Edinburgh Live said: properties have “Risen by more than 63 per cent throughout one in-demand Edinburgh Neighbourhood”, according to a report commissioned by ESPC, two/three-bedroom homes are being snapped up, whilst in some areas like Abbeyhill, “The cost of a 1-bedroom flat has fallen by 1.8 per cent”. Read more-Edinburgh Live.
Carefully consider both the advantages and disadvantages of purchasing a property that could be labeled as a fixer upper.
While you very well may be able to purchase the property for less money than other properties, you may very well find that you have purchased a money pit.
If a lot of major repairs and renovations are required, this can equate to a large investment of both time and money. In this case, it would be better to pay more for a property that requires less attention.
Before you purchase any property, take the time to have it inspected. Even if you have inspected the property on your own, you should still have a professional go over the property to be certain that:
The electrical wiring meets code
There is no lead in the paint
Overall, the property is safe.
An inspection can sometimes turn up problems which you might not notice but which could ultimately cost thousands of pounds to correct. You will typically be required to pay for the inspection; however, it is a wise investment that could save you quite a bit of time and money.
Take the time as well to research the local property market and the neighbourhood.
Check with the local police department to find out whether the area is safe and if you will need to provide any additional security.
Drop by the local town hall to determine whether there are any plans for the local area that could potentially lower the value of the property.
Research the property market in the area to find out the condition of prices. If prices have gone down recently, this could be an indication that rents will also be low. On the other hand, if home prices in the area are high, this could indicate the area is in demand that you may be able to charger higher rents.
Finally, do not make the mistake of ‘settling’ for a property simply because you are in a rush to invest in rental property. This could result in an investment that will require you to spend more time and/or money than you originally planned and detract from your profit margin.
There are lots of avenues to getting on the investment property ladder, but making irrational decisions can evidently become a burden, losing you money instead of increasing your profits. But, with these tips you are a few steps closer to your goal.
SWG wants to continue to help you on your path of securing your finances. We offer a wide range of property courses, focused on preparing you for success in your venture, our FREE lifetime access resources are also massively helpful, download today. For weekly blogs we post every Monday!