Here are 7 tips to help you successfully invest in the right real estate:
- Research the area where you’d like to buy. Is it in decline or on the way up? A good indication is if large stores like Asda, Tesco and Home Depot are moving in. These companies do a lot of work on demographics and income before deciding where to locate.
- Use a real estate agent who also is an area investor. Ask them to show you their properties and the rents. Ask for the names of other investors they have helped. Call them. Make sure they have a team of professionals you can use, such as property managers, insurance advisers, mortgage brokers, surveyors and accountants.
- Once you own more than four rental units, find a reliable property manager. You don’t want to take a call in the middle of the night. A rule of thumb is that you should allocate up to 10 per cent of monthly rent to a property manager. They will make sure your property is properly maintained and can help find tenants.
- Do not be in a hurry to rent a vacant property. Take your time to qualify any potential tenant, since it can take months to evict a problem tenant. Call all tenant references, ask for a current pay slip and speak to at least two prior landlords.
- Be careful with apartments and student homes. Although these properties can provide additional income, you must make sure that they meet all legal requirements.
- Buy and hold your property for the long term. This way, you have an income and slowly start to pay down your mortgage.
- If you are investing with others, have a partnership agreement. Problems may occur later if the friendship breaks down, especially if one partner loses their job and cannot pay their share of expenses, or if one partner wants to sell while the other does not. With a partnership agreement, you can provide what will happen in these situations in advance, without having to pay costly legal fees to figure it out later.
If you're looking for quality real estate investment advice, please do get in touch.
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