Buy to let property is a fantastic way to ensure your future. Why are there
so many people interested in purchasing properties? Instead of investing
your hard earned money in the stock market some people recommend that you buy
properties to let because it can be a much safer and stable way to earn money on
your investment. In fact, those people that formerly relied on the
dividends provided by shares to build up their pensions are now turning to this
type of investment.
Michael Flannagan, a property owner explains why everyone is interested in
buying property: I can trust that my properties will be worth something in
the future. It's not like shares where I do have any guarantees and nail
biting is common.
People are buying up property as fast as they can because the return on the
investment is far more reliable than any other short or long term investment.
Becoming a landlord is an excellent way to earn a decent return on your
investment once the mortgage is paid in full, all of the income associated with
the property you let will be profit; less tax and the cost of property
maintenance of course. If you do things wisely, the money earned from the
property you let can actually pay the mortgage. Unlike the price of shares
which can fluctuate wildly, the value of property rarely declines.
Clearly, the act of letting
properties is based on the safety of the investment.
Nevertheless, when you start buying properties to let there are a few things
that you will need to consider. First, being a landlord is not always a
simple task: at least it is not as simple as it first sounds. As a
landlord, you will be legally responsible for the property and will be governed
by various legislation that applies to letting properties. The best person
to advise you about your rights and obligations as a landlord would be a
solicitor knowledgeable about properties and property letting.
You will also need to consider that there may be times when the property is
vacant between tenants so good accounting needs to be applied. Remember,
if you are counting on the money you get for letting the property to pay the
mortgage you won't necessarily have the cash immediately available. Clearly, if
you begin buying properties with a view to letting them, it would be better that
you have a contingency to cover the mortgage during the periods where you will
find yourself without a tenant.
Another thing to consider as a landlord is that not every tenant is going to
be the perfect tenant. In fact, some tenants may damage the property and
you may be forced to make repairs to the property before you are able to let the
property again. Again, having a cash reserve for such occasions is
warranted in order to be truly prepared for whatever mishap may come your way.
Better yet, investing in building and contents insurance is a must if you plan
on letting any property insurance should help you cover some or all of the
damage to your property.
When you decide to invest in property you will want to buy in an area that
has many resources for the potential tenant. In fact, the more resources
available for the potential tenant or tenants the better resources such as
nearby shopping areas, recreational facilities and schools all make the property
you plan to let particularly attractive. By purchasing property that is
surrounded by resources, you will find that you will have a much easier time in
letting the property. This is an important forethought when choosing your
property.
Experts also advise that you keep the property you purchase for the long term
if you really want to gain better returns from your purchase. Ken Derby, a
property agent states it well, “Be prepared to hold on to the property you
purchase for the long term. Don't be in a hurry to make a fast turn around
and don't panic if the property prices drop suddenly. Property prices will
rise again and your investment will be fine if you don't panic
Don't expect to rake in the cash once you purchase a property.
Remember, like shares, purchasing property is an investment in the future, one
that can make you a considerable capital profit over time. Only after the
mortgage is fully paid off will you begin to see a significant turn around in
terms of income but on the other hand, you can establish a regular moderate
income by letting properties that are geared correctly there the rent is more
than the mortgage payment of course, you won't want to set the rent too high as
it could deter tenants in a competitive market.
There is money to be made buying properties and letting them as long as you
buy the right property and are willing to hold on to your initial
investment as well as being properly prepared for the that periods. For
all intents and purposes, the buy to let trend is replacing the market in shares
investment because there are far fewer risks associated and buying a property to
let can be a more stable environment for your hard earned cash.
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