Buying-to-rent is becoming one of the most popular investment methods around right now. But there are a few things you need to know before you start chasing this dream for yourself.
It’s not a get-rich-quick scheme
You should know by now the investing in real estate has never been a get-rich-quick scheme. Sure, there are people out there who have made millions in real estate. (In fact, there are some rare beasts who have made billions.) But they definitely didn’t make it overnight, or even within a year.
It takes years for property to increase in value in a really substantial way. Renting out an owned property is a good way of getting a return on investment in the meantime. But this isn’t some shortcut to getting rich.
You should treat it like you’re looking for your own home
When you’re looking for a place to invest in, you should treat the process as though you’re looking for your own home. You want a house that’s going to be as attractive as possible for potential tenants, right?
So check out the crime rates in the local area. See what amenities are nearby – is there easy access to public transport? Are there good places to eat? Is there a movie theatre nearby?
If the home is attractive to you, then it is more likely to be attractive to other people. And who knows? Maybe one day you’ll decide to move into it. Consider that.
Don’t want to be a landlord? You don’t have to be
Okay, so technically you’re going to be the landlord either way. You do own the property, after all. But fulfilling all those responsibilities that a landlord has to their tenants is hard. Buy-to-rent can be a great way of making an investment, but a lot of people simply don’t want all that hassle.
Thankfully, that doesn’t mean you have to miss out on the buy-to-rent dream. You can hire rental property managers who will be able to handle that sort of thing for you.
Think about what sort of tenants you’re after
You can try to find tenants yourself, or you can choose to work with a lettings agent. Either way, you’ll want to give careful consideration to the kind of tenants you want to let to. Some people who are looking to buy-to-rent are interested in providing affordable rent to younger people. (They are, after all, having the hardest time affording a roof over their head.)
Your “target audience” should be considered when looking for a house, as well as when pricing and marketing the place.
You don’t need all of the capital upfront
There’s a misconception that in order to buy-to-rent, you need all the money upfront. But the process of getting a property for this purpose is the same as getting a property for any other purpose.
That means that you can apply for a mortgage for buy-to-rent pursuits. There are actually mortgages out there that are tailored to this specific purpose. So this whole thing may be easier to afford than you currently think!