Buying To Let: Property Advice

                                                                                         

We’ve all heard that buying a property for rental purposes is an excellent investment. But what we don’t know is how to make sure that we get the maximum return on our investment. It’s not as easy as picking out a nice flat or house, it takes careful planning in terms of where to buy, what type of property you want to buy, who you want to let the property to, how long you want to spend before you get a return and who will be managing the entire process.

Ok, so that sounds like a bit of a mouthful but it doesn’t have to be a painful process. In fact if you plan properly, learn more about the property market and commit to making the venture a success it’ll be worth it. The returns are not immediate but can be quite high if you are willing to commit to a long term plan.

The downside to buying to let is that the property market is not incredibly flexible. You will have to weigh up the pros and cons quite carefully before making any final decisions. Property experts will be able to give you the sound advice you need to help you make your decision. They are well versed in what needs to be done and what areas are more profitable than others; so it is highly advisable that you seek consultation from one.

The Rental Market
Demand for rental property is high because of the sheer number of people who can’t afford to buy in such an expensive property climate. Rental properties are perfect for students, first-time house hunters who can’t afford to buy and young professionals. People moving in from new towns or countries are also a big part of the rental market as they’ll need some time to suss out the market and get a feel for their new environment before they buy.

Many potential buyers are under the impression that it’s only smaller houses or flats that get steady rentals. This, however, is not true. Many people are looking for family homes with three to four bedrooms to rent on a long term basis so bigger properties should not be completely disregarded when house hunting.

Tips on Buying-to-Let
Here are some points to consider before jumping in head first and buying a property:

Choosing the Area
You’ll want to choose an area that is in high demand if you want to ensure that your property stays lettable 365 days a year. Buying in a holiday town may mean that your property is uninhabited for a large portion of the year – though if it is an exceptionally popular holiday destination you could charge quite high rentals on the property. It’s also worthwhile noting that maintaining a holiday property requires quite a bit of work from your side.

The best area to buy in is one which is well developed in terms of facilities, schools and shopping centres. Many people choose to invest in areas like these as they lend themselves to long term rentals. What many people do is choose an area that they themselves want to live in, purchase a home or flat and rent it out until a large portion of the bond is paid off and then move into it themselves.

Choosing your Tenants
In the perfect world we’d all have a Brady Bunch type of family wanting to rent from us – but as I’m sure you’ve noticed this is not a perfect world.

You’ll want to check out your candidates quite thoroughly before giving them the nod. Obviously they’ll need to be able to afford the rental on a monthly basis and not be a serial killer – a background check will reveal all of this. You’ll also want to take the area your property is located in into consideration – if you’ve bought in a quiet security complex where the average residents are older couples the chances of picking students who are big fans of partying the night away to deafening trance beats is likely to be the wrong decision.

If you want to cater to the younger market make sure you buy in the appropriate area. Many landlords choose to accommodate older, more stable, tenants who are less likely to damage property or upset the neighbours. That being said there is a huge market for student tenants – you really just need to weigh up the pros and cons.

Property Management
Many homeowners who have decided to rent out their property choose a property management company to oversee everything. While you may have to pay them a fee it can sometimes be a lot easier to leave it all up to an agent. Rental agents handle everything from screening potential tenants to dealing with the rent payments and the inevitable leaky geysers or faulty alarm type of situations that tend to crop up. The choice you have to make here is whether you are willing to sacrifice some of the rent that the property will be earning or not. Shop around if you’re looking for a property management company – reputable rather than cheap is the way to go. Obviously if you live out of town or are an international investor then this will be the only solution for you.

About the author:
The Property24 portal is South Africa's foremost online marketplace for homebuyers, sellers, owners, landlords and tenants. Property24 is the most comprehensive and up-to-date source of market news and advice for investors looking to but to rent, homeowners, sellers and buyers as well as statistics and services relating to the sale, purchase, ownership and management of residential property.

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