Collaborative Post
As you all know I'm a bit addicted to the Rightmove scroll! Lately, though the reason for this has changed a little. Yes, I'd love to move to a bigger house but we've decided that if we do move it has to be THE move to the home of dreams. The reason that I continue to scroll is we are seriously considering buying a property to rent out.
This will be what I deem a super grown-up move for us, but I already know from my previous employment within the housing sector that taking on an investment property is not something to be done lightly.
Haveyou considered investing in property but unsure on whether you’re ready? Whilethere are many advantages of property investment, you can only benefit if youinvest in the right circ*mstances. To help you establish if you’re ready toinvest, read on to find out if you’re in a position to achieve success in theproperty market.
Your goals are set
Beforemaking any sort of investment, it is essential that you establish both yourshort and long-term goals, although the latter is more important when investing.This is because purchasing property is a massive investment to make, therefore,you should not invest if you’re aiming to retain fast cash. Now, this doesn’tmean you won’t gain fast profits, as you definitely will. However, instead oflooking at property as a fast financial solution, it should be used as along-term strategy for buying your dream home or using the capital to enjoy acomfortable retirement.
Wheninvesting you need to establish where you want to invest, which should be alocation with high rental yields that will provide you with substantialreturns. To help you find a profitable property, you should seek help fromproperty experts like RW Invest. They will offer theirprofessional advice while also giving you access to the most lucrativeproperties in the north-west.
You have significant savings
Let’sface it; if you don’t have a sufficient amount of capital saved up, there is noway that you can afford to purchase a property and maintain it. You may notrealise that there are several expenses associated with buy to let investmentin particular. So, if you do have savings in place, you should work out whetheryou can afford to invest. To start, you need to figure out yourcap rate, which is calculated usingyour estimated monthly rental income, the property price, and associatedexpenses. This will allow you toestablish your potential returns, and if this works financially, then youshould definitely consider investing.
Ifyou’re determined to invest in property but not great at saving, there are anumber of steps you can take. For example, you could open a savings account,which should be left alone to generate interest. The longer it is left, themore capital you will gain, so you should set yourself a short-term goal toinput a specific amount every month out of your wages, which should allow youto achieve your long-term property goals.
You have paid off high-interest debt
Wheninvesting, you want to make sure that there is no risk associated with yourpurchase, so if all your high-interest debt like credit cards or credit linesare paid off, you can invest right away. If not, you should consider paying offas much debt as you can, especially for debt with interest rates over 7%.
Ifpossible, you should also consider paying off lower forms of debt such as carloans, mortgages, and student debt. Although these hold lower interest rates,it is best to reduce as much risk as possible. You should also make sure thatyou have a relatively good credit rating when investing, although it does nothave to perfect, as this will allow you to receive efficient financing.
You can take on landlordresponsibilities
Ifyou’re retired or planning to come out of full-time employment, becoming alandlord is a great way to gain a significant amount of income. You can chooseto take on full-time landlord responsibilities, which is only advised if youhave no other commitments. This is because being a landlord can take up a lotof your time, especially if you take on a hands-on investment. This includesmanaging the property, taking rent, dealing with tenant queries, and evenconducting regular maintenance.
Youcan also take a hands-off approach if you’re still working, although this meansyou need to employ a property manager or qualified company to ensure yourinvestment is running smoothly. You could decide to give them all theresponsibility, or just some of it. For instance, you could choose to take onthe money side of the investment while they deal with the day to dayoperations.
For us, we're currently in the savings stage, how about you?
Mummy Snowy Owl
xx
