WOW! You know the famous saying ‘time flies when you’re having fun’? Well this has definitely been the case over the last 4 weeks. I have been truly blessed to have family stay with me in Barbados for the last month but earlier this week, they flew home back to the UK.
As I was saying my goodbyes I started thinking about my property journey, where it all began and where I am now.
Many of you may know that when I started my journey I begged, borrowed and saved the little money I had to attend a property training day in London. I have to be honest and say the majority of what they said went straight over my head, but I understood and took away one strategy. This was the ‘buy to let’ strategy. The fear of purchasing my first property was so overwhelming but my big why of creating financial security for my 2 beautiful daughters pushed and inspired me to take the leap of faith.
I couldn’t believe it when this property gave me the financial security I’d always dreamt of. So I did it again… and again… and again! Before I knew it I had 34 properties! And counting.
What I love about this strategy is it’s still so relevant in today’s market! It also gives you the opportunity to become an incredible landlord!
So… for this week’s blog, I thought it would be rather fitting to give you my top 5 tips of investing in buy to let properties and most importantly… becoming a good landlord!
So with that in mind let’s get started…
1. Your Gold Mine area
Research, research, research! This is the key!
So many people look at their immediate area where they live to invest, but your money may not perform as well in this area as it could do in others. As a general rule, my students tend to look within an hours radius of where they live for properties. The main reasons being you’re close enough to view the property before purchasing and you can be on hand if you need to visit during the renovation (if needed). You’ll also more than likely know the area so will have first hand knowledge of what the area is like.
Tip: Be sure to double check with agents and utilise the internet as what could have been a ‘no-go’ area could have had a tonne of investment and it’s now an up and coming area.
Also be mindful of the seriously cheap properties. So many people fall into the trap of buying a property that is well below market value with the idea of a huge return. The truth is there could be a tonne of additional work that you may not know about or the area could be difficult to let in.
So do enough research to know your area before opening your purse! This may sound overly simplistic but this is probably the most important aspect of a successful buy to let investment.
When you have done all of this, you have found your ‘gold-mine area’! Hurray!
2. Know your numbers
Before you get tempted to throw caution to the wind and view every property in your ‘gold-mine’ area, you need to get to know your numbers.
This ranges from the cost of houses you are looking at and the rent you are likely to get to the maintenance costs.
Tip: Don’t forget to cover for any periods where the property maybe stood empty or you need to do an urgent repair.
If you need a mortgage, you’ll also have to shop around for the best ‘buy to let’ mortgage. Although the next sentence I type may seem pretty much common sense, I feel like I need to point it out… don’t just walk into the bank you’re with and take their mortgage, explore the other options available to you. Do some research! It pays to see an independent advisor who can explain what deals are available to you and they will also help you weigh up which one is right for you.
When you have done all of the above you’ll know exactly where you’re at and you’ll have a realistic hold of your purse strings!
3. Build relationships with Estate Agents
Ok, so you’ve done loads of research and you’re confident you’ve found the right area and you have a clear and realistic idea of what your budget! So what’s next?! Sourcing the property…
There’s so many websites out there such as Rightmove and Zoopa which are so accessible you can check them anywhere while you’re on the go. But the one thing I highly recommend you do is to personally visit the estate agents in your desired area to introduce yourself. There really is nothing like the personal touch.
When you visit, make sure you’re clear about what you’re looking for, what area and what budget you have. Some agents may even call you to offer you first refusals before putting properties on the market! They may also work harder for you to get you the best deal!
4. The perfect tenant!
This is part of the process where investors can come a bit unstuck.
Please, please, please remember you are buying properties to rent out… not for you to live in. I have seen so many people run away with themselves when they are decorating and potentially furnishing properties to rent out. The main thing to remember is the property needs to be in a good state of repair and is clean and comfortable.
For example, you may be looking at properties that are perfect for families. If so they may have plenty of their own belongings and wall art so a blank canvass is usually the best option.
Tip: if you have a family home, look for ways to utilise the hidden room such as the cupboard under the stairs. Is this big enough to use as a cloakroom? Families usually love the extra storage so by paying attention to little details like this, may put your property head and shoulders above others.
Also, remember that allowing tenants to make their mark on a property, such as by decorating, or adding pictures to the walls makes it feel more like home. This may encourage the tenants to stay for longer which is a great win-win situation.
5. Consider how hands on you want to be
So now you’ve done all of the hard work… this is the easy part… right? Well it all depends on you! You needs to decide how hands on you want to be. When I had my first property… I used to call around once a week to make sure everything was OK. The tenant thought it was wonderful and we created a special relationship. However, when the numbers I had grew, the personal touch became much more difficult.
There are so many options out there; you may decide to manage your properties yourself or utilise one of the many agents that will manage your properties on your behalf. Agents will take a fee but will deal with the day to day management such as any repairs etc. that may arise.
If you think agents are the way to go… then shop around. There are so many out there, both big and small. Some offer guaranteed rent while others don’t. Some offer a 24 hour repair service while others don’t. Some may not even have a repair service to offer! So you really do need to choose the agent that will work well for you.
If you decide to go at it alone, think about where you will advertise your property. You will also need to think of the legal side such as providing a fit for purpose Tenancy Agreement.
One thing to remember, regardless who manages your property is that it really pays to look after your tenants. Do this and they will look after you.
So there you have it! My top 5 tips to investing in Buy to Rent properties! I’m thankful every day that this strategy started me on my journey. In fact, I remember getting to the lucky number of 13 properties and Sacking the Boss!
And now I’ve just said bye to my lovely family, who have been here for one whole month in Barbados. We enjoyed swimming, going on boat trips, eating in beautiful restaurants and well just chilling out. It’s made me realise how far how I’ve come and my girls who followed in my property footsteps. I am so thankful, even though I felt scared, I got started. Is this But to Let strategy right for you? It could be the model to take you to financial security!
I’d love to hear your thoughts and comments about this blog and where you’re at on your property journey. Why not leave me a comment below?
Live the Life you Love,