Your first step into the world of real estate can be a challenging one to navigate; however, if you make the right moves at the right time, you can have a lucrative future ahead.
Multi-property buildings offer many benefits against a portfolio of individual properties; they also can prove to be more difficult in various circumstances. Therefore, it’s vital that you take into account the different aspects before you consider investing your money. The following are some areas of the multi-property real estate market to think about for those who are about to make their first purchase and gain the title of landlord.
Do Your Homework On The Location
The first thing on your list should be to scope out the area you’re thinking of buying a property. Ask yourself why the property is on the market and if you should have concerns that the flats or apartments won’t rent out or not. New buildings are often a great investment; you’ll have the benefit of not worrying about renovation, and somebody has already invested their time and money in a particular area of a town or city. Fresh buildings often come with new amenities and stores, which are appealing attributes to any potential renter.
If you’re looking to invest in a previously owned building; the same rules apply that you’d use if you were buying a singular piece of real estate. You’ll need to balance the cost of any renovation work that needs doing to bring market’s standard. Factor in the added expenses of maintenance, and consider if it’s a wise choice regarding your money. If a property is going to take a substantial amount of time to fix and repair; think about if it’ll pay off in the long run, or if you’d be better off looking elsewhere.
Consider the popularity of the area, crime rates, the level of amenities, and access the apartment building has; put yourself in the shoes of your potential renters and ask yourself if you’d find the prospect appealing or not. The family market will move because of schools and colleges, and great transportation links are vital to young professionals. Therefore, you need to walk in with the eyes and mind of your renters, before you make any big decisions.
Only when you’re satisfied with what the location of the property has to offer should you make a move and invest your money. You should have enough contingency in your funds for unexpected costs that an apartment block can bring, which can often quadruple in comparison to singular homes. Spend wisely when it comes to the survey that will be carried out and go through the legalities of the property with your lawyer; they’ll be able to spot anything that may cause you an issue in the future.
Do your best to find out why the property is on the market; will you have tenants in place to lease to, or will you have to have the added cost of advertising a new or partially leased block to new people. A trained property lawyer should be able to help guide through the lengthy and detailed process. Spending money on you legal help before you invest, could save you thousands in the future so make sure you have enough money from the get go.
Have Your Target Renters In Mind At All Times
As previously discussed; your location should reflect the needs of your target market. However, you’ll need to ensure that the interior space and amenities of your properties also meet the requirements of those who you wish to rent to. Looking into buy to let student properties is a great way to guarantee that you’ll have a steady and consistent flow of renters and income. The student market comes with its own challenges; however, you’ll never be short of someone to lease to. Keep your wits about you and make sure your security deposits are in place before you let anyone move in so that you can cover the cost of any damages that may occur; these can occasionally be more frequent due to the age of your tenants. However, you’ll be able to choose who moves in and who doesn’t.
With over 2650 new renters per day in the US alone; there are plenty of opportunities to take advantage of the multi-property real estate market. However, you could also look into vacation properties for overseas clients; these can bring in more rental income during peak seasons, but you’ll need to maintain a steady flow of cash during the periods when holidaymakers go home. Again, the location of the vacation apartments will have a huge impact on how many months of the year you’re able to lease them for, so bear this in mind before investing.
A difficult market to crack is the commercial property market; however, these can be far more lucrative than the residential property market. There is more scope with businesses who need somewhere to lease from; they are more likely to be long term investors in your building and will take care of their environments better. If the property is a mix of offices and shops; the appearance and maintenance will be a priority for renters, so they tend to be more reliable than a residential lease. Bear in mind; after calculating your returns and deciding to invest in a commercial building, you’ll need about a 30% deposit to put down beforehand, which can make it a harder to reach part of the real estate market. Filling a commercial property with paying renters will be a long term investment that could really pay off; businesses tend to do their research and will move into areas where they’ll grow and prosper, so it’s a great opportunity should you find one.
Whatever multi-property real estate option you chooses; always think about your target market and the location the property will offer them above all else. Ensuring that your renters will be happy in their home or environment will increase the chances of a consistent income and filled properties, which will give you financial peace of mind.
This is a collaborated post.