The old adage that property is as safe as houses in terms of investment potential is as true today as it was thirty years ago. While the days of purchasing a property and merely sitting on it and doing nothing while you wait for the market to rise naturally are long gone, there are still plenty of ways that you can outperform the market and maximize your investment. While the early noughties saw an emergence of would-be property developers and investors, this sideline has now become a little more muted as the housing market isn’t as wildly attractive as it was fifteen years ago. However, if you have a nest egg that’s languishing in a savings account, you should consider bricks and mortar as a way of making your money work more aggressively for you.
While you could choose to flip a property by purchasing the worst house on the best street for the right money, budgeting for a scheme of renovation works and then relisting within three months and selling at a profit, this can be hard to achieve if you already have a full-time job. Instead, many people see property as a long-term investment and a way of setting themselves up for a more prosperous retirement.
You need to scour the property pages and source a dwelling that will attract young professionals looking to rent. Source a pad close to good transport links, surrounded by cafes, bars and shops, in the thick of things and in a salubrious area. Head to those vicinities that are already established, like those suggested at https://www.forbes.com/sites/ingowinzer/2016/07/29/, to be sure of a healthy return.
It’s vital that the rent that you charge each month covers your mortgage repayments. This way, the tenant is effectively paying your home loan, and you can hold onto your asset as you watch it increase in value. You still need to ensure that you can afford to cover the mortgage for at least three months, just in case your property is unoccupied for any reason. An investment should never put your financial buoyancy at risk. If you can realize a 7% rental yield, you have yourself an effective little investment that will tick over for a decade or more. Many novice landlords keep hold of their pads until the mortgage is paid off and the rental payment each month becomes another income. Others sell when they have built up enough equity within the property to reinvest for their twilight years.
Your Responsibilities As a Landlord
While you reap the rewards of letting out your dwelling, you also need to be aware of your responsibilities. You could choose to go it alone and be the first point of contact for your tenant should there be a leaky washing machine, a hole in the roof or a faulty boiler. In this case, you need to sort out the issues immediately whether you are handy with a wrench or not. Alternatively, you could take a look at a site like https://carispropertymanagement.com/property-management/los-angeles-metro-area/culver-city/ and allow a property management firm to handle the nitty-gritty issues of your rental. They can screen your tenant, fix any maintenance problems and recover your rental payments each month, making this a hugely convenient service.
Becoming a landlord isn’t as easy as it may first appear. However, by selecting your property purchase wisely and ensuring your calculations stack up, you could be investing in the ideal long-term property venture.