3 Economic Errors and How to Avoid Them
Many landlords would agree when it comes to investing it’s imperative that you avoid as many errors and bumps in the road as possible. That way ensuring a smooth investment and the potential to increase your return on investment. We’ve put together 3 of the most common budget busters and how to avoid them to ensure the best possible investment.
From the start…
Often, landlords can slip up from day one – this is one of the costliest errors on their investment journey. When you have budget errors at the very beginning, you’re ultimately going to see it reflected in your profit potential and paying the wrong price for the wrong property could affect your rental return, expected yield and capital growth on resale, put simply it can damage your investment from day one.
Ensure that all of the finances work out, research the market and contact other agents to find out what they would expect for a rental return on your potential new property. Ensure you’re negotiating property, if you believe the property is worth less than advertised, challenge this and don’t forget to commission a HomeBuyers Report to help identify anything that is likely to prove expensive down the line. Find out what properties the area needs most of in the way of rental homes, what are tenants looking for and what is renting quickly – this way you will be able to adjust your investment to suit the genuine needs of the area.
Ask yourself exactly what would make a tenant pick your property, if you can’t find many positives then it may be time to make some improvements. Tired décor, damaged fixtures and dated appliances will all help to increase your void periods – you may need to spend some money in the short term to help you make more in the long term.
Most modern renters look for contemporary, fresh and neutral properties that they can call home, have a look around on the market to see what other landlords have done to their properties – this will help you to understand exactly what needs doing so your property is seen as the most desirable. It’s good at this point to also talk to the agent – this will help you to profile a tenant that would likely be interested in your property, this will, in turn, allow you to make smarter decisions about the exact changes the property needs which will help you to keep the budget down.
Having the wrong tenant in your property can cause you all manner of issues if they’re prone to late payments or causes damage to the property your profit potential will be greatly affected. Finding out more about your tenant, doing background checks and getting to know them before signing the tenancy will help you to know whether or not they are suitable for your property. This is an expensive investment that shouldn’t be taken lightly and you want the peace of mind that the right person is living in your property. Regular inspections will help you to ensure that the tenant is living within the terms agreed in the Tenancy Agreement.
Your local Belvoir expert will help you to maximise your investment and minimise any negative impact. Find and contact your local office today to talk to a member of our friendly nationwide team.