Many people can see the benefits of investing in property, and one of the biggest plus points is that real estate is a fantastic asset. Although there will certainly be times when the property market has a downturn, as long as you hold onto the property for long enough, you are almost guaranteed to make a profit.
In the meantime, if you rent the property to tenants and become a landlord, you can make money while you’re waiting for the bigger payout. If that sounds interesting, read on to find out how to get started with property investing.
Know Your Goals
It doesn’t matter what business you are in; you need to have goals. You have to have something to work towards so you can get where you want to go and so you know when you are being successful (or not, in which case, you can make important changes).
When you want to invest in real estate, you also need to have goals. This is a business, after all, even if you hadn’t thought of it like that before. Therefore, having goals is a crucial part of property investment.
In other words, you need to know about what kind of property you want to invest in. You need to know how much you want to spend and earn. You need to know what your exit strategy is and how you intend to manage your properties in the meantime. It’s a good idea to create a business plan to lay out all your goals and ideas. You can also use this when you need to borrow money, such as if you need hard money loans to help you make a purchase.
Think Quality, Not Quantity
If you want to invest in real estate, it’s a good idea to have more than one property in your portfolio. That way, should you find one property is left empty for a while (and therefore is not bringing in an income), you still have one or two others to rely on. If you need to spend some money refurbishing a property, you can use the others to help you by releasing equity or increasing the rent (where appropriate).
However, it can become tempting to start buying more and more properties, especially if you see that the price is low. The issue is that these lower-cost properties can be harder to rent as they might not be in a popular area or there could be maintenance problems. It’s far better to buy a small number of good-quality properties than it is to buy a lot of poor-quality ones that cost you more than you can make to take care of.
Speak To Experts
At first, it might not seem as though there is much to the role of being a landlord. You find tenants, you organize the rental agreement, and you sit back and let the money come to you. If this is what you’re thinking, you need to reassess. It’s not that easy.
How do you find tenants? How do you know they can pay you? What about maintaining the property? How do you write a rental agreement, carry out a property inspection, and end a tenancy when you need to?
Although it will cost some of your income – usually a percentage of the rent you are charging – having a management company to help you is a great idea. In that way, you can focus on building your portfolio and being the best landlord you can be while someone else takes care of the more challenging parts of the process, ensuring you have the right tenants.