Considerations to Make When Buying Your First Rental Property
A rental property can be a great investment. If you make the right decisions when choosing the actual property, that is. If this is your first time, therefore, and you are looking to navigate the often-overwhelming property market in search of that perfect investment, we have put together some important considerations you need to make before arriving at your final decision.
The biggest decision and one of the most important you need to make with regards your rental property is its location. This has huge bearings on you and your tenants. You need to consider, first, how hands on or not as a landlord you intend on being. If you are looking to have the opportunity to inspect and check on the property regularly, you will be best opting for a property that is close to where you live or work. However, if this is not as big a concern for you, then you can obviously cast your net a little further out.
The location of the property is also a determining factor on the amount of rent you will be able to charge. Furthermore, you need to give some thought and consideration to what’s around the location of the property. Are there sufficient transport links and local shops that are going to appeal to a wider range of tenants. Obviously, there are other more specific things you’ll want to consider if you are looking to attract very specific types of tenants.
The Desirability of the Property For Tenants
You are not going to make money and instead could possibly lose money if you don’t have a property that appeals to your target tenants. Therefore, you need to think of the kind of tenants you would like to have in your property. Are you looking to make money from student renters? If you are, then the proximity of the property to the nearest university is important to consider.
What if you are looking to attract families? Then the proximity of the property to local schools may be a huge deal breaker for some choosing yours over other properties.
The kind of property will also have a huge bearing on how desirable it is to specific tenants. A family are more likely to be attracted to a home with three bedrooms and a garden than a single professional is.
It’s also good to think about the décor, along with the look, the feel and the kind of ambiance a property has. You may need to update and redecorate the property if it is looking a little outdated.
The Effort You Expect to Put Into Being a Landlord
There are a variety of reasons why people become landlords. Perhaps you are looking to find a property you can carry out work on and put a lot of time and effort into before you let it. Whereas, you may be more interested in finding a property that is ready for tenants to move into. When you are looking at property, have it properly surveyed and assessed so that you can suss out any faults that may need to be sorted. While some are simple and can be completed relatively quickly, others like subsidence require more intensive repairs.
Return on Investment/Value
The final aspect of choosing a property to rent we want to discuss is the value. Not necessarily how much it costs, but rather the value it can offer you. As buying a property to rent is an investment, you need to think about how good the return on your investment you are going to get. Most of the value you will derive from a property will be from the rent. The best way to check what you are going to get is by looking at the same kind of properties in the same area and see what the rent charges for them are.