Finding the right property to begin your journey into property investment doesn’t have to feel like an obstacle. No, far from it. All it takes to get started is knowing where to look, and establishing if there is a rental demand to make it worth while. And we can guarantee you’re real estate agent will be more than happy to lend you a helping hand with that task.
You see the great thing about property investment is that once you know what works, you will be able to pass on this information to your estate agents who in turn will be able to compile a list of which properties match – just for you. But first before all this, here are 4 simple tools to help you narrow down your selection criteria.
Despite rental prices rising by 15% in the last 6 months, there are still properties out there that generate profits below the market rate. Now you’re probably thinking straight away “okay I’ll avoid those properties”, but here is the catch… there is still a potential profit hidden within these rental properties.
You see, these rental prices are based on property values. So if you can find a property that is low in value and border-line profitable. You can essentially turn this information around; bring the property up to standard, and reap the rewards of a property low on repayments, but high in rental yields. After all, rental properties are predicted to rise another 15% in the next two years. Plenty of time for you to acquire a good return investment and increase your positive cash flow.
Where do people want to live? Do your research and you’ll soon notice a trend. A neighbourhood or region undergoing some form of improvement will experience increased interest over time. So to take advantage of these deals you need to get your timing right. You need to get in before property prices flourish, and invest while they are still low.
So what causes an area to improve? There are many reasons really, but the top three are: jobs opportunities, new businesses and zoning changes.
In our current financial climate, finding a property being offered for below its real property value is not uncommon, but in a property boom it is rare. This is not to say it won’t happen. That there won’t be cases where homeowners are wanting to sell up fast and reduce their property prices. But it is just a matter of keeping your eyes open; spotting these property bargains and investing.
You see, even if they are being sold below market value, these doesn’t mean their rental value will have fallen alongside it. No. In reality, by investing at below value, the differences between your monthly repayments and rental income will be even higher. Why? Because your tenant will still be expected to pay rental yields to match the properties real value.
If you can find a property that has got a high value potential but requires minimal improvement costs, then you are onto a winner. The one mistake many investors make when investing in a property, is investing low to only go on and make unnecessary improvements later.
Quite often many investors let their own personal preferences take over. They renovate more under the influence that it is their own home, than as a property they plan to rent out. And this is where the costs start piling up. But if, like we said before, you can find a property that is low in value to buy, but when renovated would be worth substantially more. The extra you’ll have left over from your down payment can be used to fund this quick renovation. You just need to keep your costs low, and the rest will come naturally.
And that’s it. By utilising real estate agents, doing your research and keeping an open mind on what you need to create a positive cash flow, building up your property investment portfolio couldn’t be simpler.
So get started. Now, more than ever, is the perfect time to start harnessing the property market and take advantage of all the incredible deals that are on offer.