Buying a property as an investment can be a great way to secure your financial future. But it doesn’t come without it’s risks. There are lots of things to consider before making such a huge purchase. If you’re thinking of buying an investment property, then you need to make sure you’ve covered all the basis and weighed up all of the pros and cons before you make that purchase. Here are 5 things to consider before investing in property.
How much you can expect to make in rental income?
If you’re buying a property as a landlord, with the intention of renting the property out, then you definitely need to look at the figures before diving in.
You may want to contact local estate agents to find out how much you’re likely to be able to charge in rent. This will vary drastically from area to area, so estate agents who know the area well are often a good starting point.
Annual expenses of owning a rental property.
Owning a rental property doesn’t come cheap. Obviously you need to factor in the purchase price. But there are lots of other fees and charges to consider too.
If your property was empty for a while, would you be able to cover the costs of the mortgage, council tax and whatever else may land at your feet?
If you’re planning on using an estate agent, then you need to know what their fees will be too. Most will charge a percentage of the monthly rent in order to manage the property.
Consider any repairs that might need undertaking too. Could you cover the costs of a new boiler if that broke down?
There are also insurances that you need to have in place too – make sure you know what you need legally and how much it will cost.
Know the risks.
There are many risks involved in renting out a property.
Unfortunately, not all tenants will take good care of your property. Are you prepared for damage to the property, or late or non-payment of rent? Can you afford to cover the costs of evicting a tenant if you need to?
Make sure you have a good deposit.
Buy-to-let mortgages often require a larger deposit that a standard mortgage. Make sure that you carry out your research and build up a decent deposit before you start house hunting.
Seek professional advice.
Above all else, you need to make sure that buying a rental property is the right decision for you. Seeking professional and legal advice early on is imperative.
Purchasing a house is a huge expense and you need to make sure that it’s a sound investment for your future.
Experts are able to look at all the facts and figures from an outsider’s point of view and advise you on whether purchasing a property is a good idea for you and your family.
You can find more tips for buy-to-let here https://www.thisismoney.co.uk/money/mortgageshome/article-1596759/Ten-tips-buy-let.html.
*This is a collaborative post.
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