While buying your very first home is a sure sign of both financial stability and a predictable lifestyle, buying an investment property is the pinnacle of financial prosperity. You’re not just buying a property so that you have somewhere to live, after all, but you’re becoming a landlord and a real estate mogul; it’s everything you ever wanted in terms of having a passive income.
Yet, managing property and making sure that it’s a sound investment is not always as easy as it might sound. Finding suitable tenants and hauling in that rent each month can’t be that difficult, after all?
If you’re about to become a landlord or if you’re considering buying your first investment property, you’ve come to the right place. Here is a handful of tips to get you started so that you can avoid the tenant nightmare once and for all.
#1 You could find better loans
Making sure that you have gone through all of your options before you invest in a property is alpha omega to being happy with your decision. There are a lot of options, though, and you shouldn’t just grab onto the first one you find; when you already own another home, you could be able to finance your next one through secured homeowner loans.
It’s as simple as taking your first property as security and you’ll even be able to get some of these with a bad credit score. Don’t just accept the first one you’re offered if you have a bad credit score, in other words, as you might be able to find a better one. Have a look around first and chat with someone who knows more about it to get the best deals.
#2 The area matters a lot
When you want a certain type of tenants, it’s especially important that you choose the kind of area that they’re likely to be living in. Sure, when you invest in a place that is close to a university and littered with party pubs around each corner, you will certainly have more than enough tenants to choose from – but your property will also be turned into a student’s home.
Choosing an area that is close to kindergartens and schools, on the other hand, makes it a bit more likely that you will attract young couples with small children or those who consider getting children soon. Think about this when hunting for a property, have a look at the standard of the neighbourhood, and chat with the people who live in the area; nobody knows more about it than they do.
#3 The first impression is important
When you have secured a loan and found the investment property of your dreams, it’s time to find the right kind of tenant for it. This is a crucial point of your investment journey, though, and it’s a good idea to keep in mind that the first impression you get of a potential tenant is more important than anything else.
Listen to your gut-feeling and consider what kind of impression they gave you. Are they well-groomed, on time, polite, and friendly? Then the chances are a bit higher that they will take care of your property, pay their rent on time, and be friendly with the neighbours as well.
It may seem silly and a bit prejudice but these things really do matter – and it could mean the difference between a well-loved property or one where you have to kick the tenants out as they’re not paying their rent.