Making a buy-to-let investment is a great way of setting up some passive income. In a job market that is increasingly unstable, and with weekly reports in the newspapers about how half of all jobs could potentially be automated within the next few decades, diversifying your revenue stream now seems like a good idea.
However, since the heady days of the early 2000s, it’s not quite so easy to make a profit while investing. Since the financial crisis of 2008-09, you can’t just by any old property and expect to make a return. With this in mind, we’ve decided to list some the top investing tips we’ve gleaned from the internet.
Know your potential market when you buy
As a buy-to-let landlord, you have to be more discriminating in your choice of property. Remember, this is not a property for you to live in. This is somewhere you are going to rent out.
Broadly, you should try to stick to newly built properties as they pose fewer problems than older ones. Two bed flats and houses are generally the easiest to let as they appeal to young professionals and young families. The more scope you have as potential tenants, the easier it is to rent.
Don’t gamble on house prices
Yes, house prices can go up. In the last two years we have seen 16% rises in Norwich. But that is not a guarantee. Don’t buy expecting to make your money solely from prices going up, your primary investment is in the yield from rental income.
If the value does go up, then it’s an added bonus. But try and ‘flip’ properties for a quick profit and you could be asking for trouble if there is a market crash. And as we all know from 2008, it does happen.
Boost returns in other ways
Buy a two bed flat and you can rent a two bed flat. That’s fine. You know exactly what you’re going to get. But to make serious money, think about other ways to squeeze money from property. Buy a large six bed family home and you might get £1500 to £2,000 a month. Split this into three two bed flats and you could push that up to £2,500.
Always make sure you’ve got the right tenants
It might seem like a pain laying out all the money at the start of the rental process but never scrimp on tenant checks, references and inventories. Using a letting agent might cut into your income by around 10% but this could save you big time in the long run. Getting rid of problem tenants can be a long and expensive process so make sure you are covered from the start.
To find out more about the local and national property market, or if you would like to chat about anything to do with property investment, give us a ring on Norwich 01603 567804 or send us a message.
For more free tips on Property Investing SIGN UP HERE.