Buying a rental property is a chance to invest, grow in equity and is seen as a ticket to early retirement. Most will dream but fewer will take the plunge due to all the information on how to buy a rental property in the first place. To ensure you pick a property that makes the best return there are practical steps to keep in mind.
Check your finances
Before you can even buy you have to make sure you can afford to invest in the first place! Make a list of your assets and how much you have in savings. Debt, while not pleasant, is also important to list.
Find a broker
Mortgage brokers are helpful when a client is unsure if they’d qualify for a loan. They act as the liaison between the bank and the borrower. A broker gathers the necessary documents including work history, assets and income reports to forward on for assessment and approval.
Find a property with wide appeal
Who is your ideal tenant? Students? couples? Singles who can share the apartment? The type of property you buy will draw in a certain type of renter. Couples may be looking at homes if they’re planning on starting a family. Students and singles may be more partial to apartments close to shops and public transport.
Do your diligence
Check the area around the property and see if the playing field is “fair”. Other investors can snap up surrounding properties making it harder to make a return. Other factors are building projects in the area and if they affect property prices as well as local area statistics like crime rates and employment levels.
Emotion is fine
Just don’t be a slave to it. Know how much risk you can stand and understand that challenges lie ahead. Starting is the hardest part of any task but the important thing is to keep going.