The property boom in the 1990s spawned a new breed of entrepreneur, and fueled by the ever growing population, the buy to let industry thrived. Many disgruntled investors who were unhappy with the meagre returns in their portfolio, turned to buying real estate and becoming landlords. You may have images of expensive cars and foreign holidays, but does the industry really generate that kind of return?
A Business Plan
All new ventures require a business plan, which details every aspect of the business, and this would include capital and running costs, along with projected forecasts of revenue. You might be able to command a high rent, but if you are spending all your profits on maintenance, then something is wrong. The business plan would enable you to examine the profit levels, and although buying to let can be very profitable, it very much depends on your ability to keep costs down, while providing your tenants with everything they are entitled to.
Before one can rent out any property, one first has to purchase it, and once you’ve crunched the numbers and are looking at possible houses, solicitor conveyancing will be required. This legal expert would likely be experienced with buy to let clients and he or she could be very helpful in many ways. This would be an essential alliance, especially if you are planning on expansion, and if you are uncertain who to contact, an online search would point you in the right direction.
This will take a large slice of your income, yet it is essential to keep the investment in prime condition. There are property management companies that provide all the essential services that a house might require, including security. They also source clients, for a small fee, and this is invaluable, as without it, you have no marketing. Unless you happen to live close by and have bags of time on your hands, it is wiser to enlist the help of a property management company.
Good Business Sense
Buy to let ticks all the right boxes, as your tenant is paying the mortgage and the rising value of the property ensures a healthy profit. Of course, it isn’t that straightforward, and with taxes and building maintenance, it is easy to fall short, but if you cost the project and select the right properties, the buy to let business can give a better return than leaving your money in the bank.
The longer your property remains tented, the more profit you will make, and the house appreciation is where your real profit lies. After a few years, with the mortgage paid off, and a surge in house prices, one could sell and make a very tidy profit. You do need to right services to enable the business to work, but if you are shrewd and make the right choices, there’s no reason why you can’t grow to become a property tycoon.