Investing in property for buy to let purposes, which means renting it out to a prospective tenant – is a lucrative business but if you’re inexperienced you may be prone to making mistakes. This is especially true if you’re a first-time investor. However, despite the number of properties you have let out over your career, there are sometimes things you will forget.
For anyone wanting to invest in a property, we have a few tips to help you avoid these mistakes and make your property investment as successful as it should be.
Becoming too emotionally attached to the property
Admittedly, property is one of the more unusual asset classes out there, as it can end up being a lot more hands-on than a stock investment. It is often the case that people will end up getting too emotionally and personally attached to the property before they let out to tenants, engrossing themselves in the unnecessary things as if it were somewhere, they are living themselves. The moment you cut the nonsense and treat your property as it should be treated, like a business, you’ll start earning more money from it.
Remember – just because you shouldn’t get too attached or ‘invested’ in the property you’re purchasing; doesn’t mean you shouldn’t keep it to a certain standard. Checking over a prospective offering with a fine-toothed-comb should still be a priority, as it will help to maintain a level of quality that will then have an effect on tenant demand. Take pride in your property as a business, but not so much in the superfluous minutia.
Go it on your own
Jumping into an investment property for the first time can be a daunting experience, and it’s typically a long-term commitment, so don’t shoot first and ask questions later.
If you’re a beginner, and don’t know where to start, contacting a property expert or an experienced property company will give you a good knowledge basis on the things to look out for. Alternatively, there are a ton of online resources out there which can give you some of the hints and tips you might need. If you’re interested in the student market, one of the most lucrative buy-to-let markets in the country currently, RW Invest have a range of different articles and guides on which cities are the best currently, and which offer the most demand from student tenants.
Choosing the wrong area
The area that you choose to buy property in is one of the most important decisions that you can possibly make in the investment process, as it will secure or squander your chance from making both a sustainable secondary income and an increase on the home’s value over time. Just because an area seems affluent, and a property costs more money to buy up front, does not mean that it is the most value beneficial.
This point again factors in with the idea of getting to emotionally entangled with the purchase of your property, as you might think that one area is ‘nicer’ than another and somewhere that you would look toward personally if you were looking to move. At the end of the day, you’re not going to be living there at all, in fact you legally can’t if it’s registered as a buy-to-let, and so stick to what’s turning heads generally rather than just your own.