Tips for property investment

There’s never the “perfect” time to buy a property, as anyone who has ever bought one will tell you. Life circumstances can change, the economy can surge or falter – it would be a rare person who thought they had chosen the best possible moment to make such a monumental decision.

What You Need To Know About Property Investment

Property investment is ranked fourth in the list of most common investments, preceded by cash, bonds and shares. There are plenty of reasons to invest in a property – maximise tax returns, to get loans against and to add an extra source of income to the household.

For budding businesses, property investment can supplement them with the income to grow the business further. While most business owners will put their profits back into the business, it is wise to keep some funds aside for property investments.

Property investment can be done in many forms – buy-to-rent, investment trusts, REITs etc., and each has its plus or minuses. The return on investment also depends on what type of property you are putting your money into, like residential, commercial, retail, or industrial. Education is the key; hence in today’s article we will look at different types of property investments, the pros and cons for each, best practices to follow and a few market trends to get you started.

Let’s start with global market trends. We won’t get into the nitty gritty details as that would be a whole other article by itself. Here are some key highlights from across the globe – Trump’s administration has not only affected the growth of America, but has also caused economic activity to suffer across the globe. Increase in the interest rates has slowed down property buying in the US; the rental market however will see bright days ahead. When it comes to Europe, Brexit may cause the Eastern and Central European property market to surge. Lisbon is the hotspot to invest in, in 2019. In Hong Kong co-living is on the rise. Foreign investments become easier in Cape Town, where as local investment becomes difficult. Property market in Australia takes a hit, where as in New Zealand, the market is in good shape and is predicted to grow further.

Now moving on to popular property investment types and how they fare against each other.

Property investments are divided into two categories – direct and indirect.

Direct investment

Direct investment is when you buy the property directly, either to give it on rent or to sell it in the future for a profit. Indirect investments in when you invest in property fund. In this case you don’t own the property,you hand over your funds to fund manager or a investment company who in turn invests them into a property or in property funds.

Investment of any kind comes with a risk, the only difference is the scale of that risk. Fixed investments, saving accounts, cash investments are generally considered low risks, whereas property investments and share are considered high risk due. Property investments, whether direct or indirect, will yield you returns in the long term as the market fluctuates intermittently. It is always advised to diversify your investments, or more simply put, do not put all your eggs in one basket.

Buying property directly, whether to rent or sell, comes with its set of risks, and some of them are as follows:

– Buying any property requires a substantial sum, even if it’s something small like a shipping container home. And unlike other assets, it takes a long time to sell a property and make a profit.

– You are investing a high amount in a single asset, so it is a big commitment, and bigger the commitment, the bigger the risk.

– You need to go through agents, fees, stamp duty, taxes, conveyance fees etc. in order to transact when buying or selling the property, these are a few things most don’t take into account and are later blindsided by.

– Maintenance of a property is a time consuming and a costly affair.

– Loans and mortgages are commonly used to buy a property, and these come with even more risks. There is no guarantee one will possess enough money to recover the loan, or if the cost of mortgage goes up and if one fails to pay the instalments, the banks or the mortgage provider can take the property away.

Indirect Investment

There are several options when it comes to buying a property indirectly – property trusts, investment trusts, REITs, Insurance property funds, offshore companies or shares in listed real estate companies are some of them.

Indirect property investments requires low capital investment and hence is assessable to individuals who want to invest in a property but do not have sufficient income to buy one or do not want the commitment that comes with buying a property. This gives them an opportunity to dabble with the market, with a significantly smaller sum. The fund is managed by professionals with years of experience behind them and who can read the markets better than a layman. Professionals often diversify their investment so as to lower the risk of any major loses.

While professionals know what they are doing, it does come with the downside of not having as much control on your investment as it would if you were investing it personally. Hence, trust and reputations are important when investing with a professional. Their experience and market know-how and ability to predict market fluctuations is what will eventually determine the returns you get on your investment, so choose wisely. Here are some of the largest property management companies in New Zealand to help your search.

Last but not the least, investing in a property means investing long-term, and for this asset to hold its shape long term, regular maintenance is required. This means getting the house pest-controlled ever so often, getting renovations done, making additions to increase its resale value, and in case of buy-to-let, getting rental appraisals done in order to get the maximum benefit out of the investments. You’ll also need to keep a list of emergency local authorities (local city corporations, police, fire-department, local housing co-corporations, flood cleanup companies, natural disaster corporation etc) and hiring a caretaker for your properties overseas or those that falls in other states or region than the one in which you reside.

Investing in a property is not easy, and certainly not cheap, so in order to make an informed decision, look for professional advice wherever possible. Take the time to do your research, and do not make hasty investments, and most importantly be patient through the process!

Top Tips For Buying Your First Rental Property

Let’s start with the basics. To pick the right rental property, be it brand new homes or old fixer-uppers, you need to know what you are investing into, how you intend to recover the costs and the benefits that come with it.

An investment property is essentially any real estate that is not bought with an intention to use or inhabit. These are generally bought with the intention of getting the returns by flipping, renting or holding it until the market goes up to make a profit on the selling price. A rental falls under the category of an investment property.

A rental is a property that the investor buys with the intention of renting it, in order to gain returns in terms of monthly paychecks. Rentals can be of different types – residential, commercial, retail, etc.. Single-family homes, apartments, duplexes, and similar properties fall under residential rental properties. The tenants generally lease the property for a longer duration as compared to the commercial tenants. Such properties are generally owned by individuals or families. Commercial rentals can consist of properties used for commercial purposes, where the tenants occupy the property short term; this includes properties such as hotels, motels, office complexes, and retail warehouses. These are generally owned by large corporates.

Direct property investments such as owning a rental come with tax benefits, which indirect investments lack. On the other hand, a rental owner has to do their bit as a landlord in terms of facilities management, maintenance and legal upkeep of the property.

Now that you know what a rental is, it’s time to know how to pick the right one! We’ve listed down some tips to make this monumental task a little bit easier.

INVEST IN A SINGLE FAMILY HOME

Test the waters before you dive in. A single family home is easier to maintain, costs less and is easier to rent out as compared to a multi-family property. The house has less wear and tear as you only have a single tenant. It will allow you to dabble with book-keeping, repair, and other duties that a landlord bears, to see if you are cut out for it before taking on a larger project. Bigger properties also mean more taxes and more maintenance costs, and the supplementary rental income you make may not cover these costs. So, start small!

TIMING IS EVERYTHING

Buying any property cost big bucks, so a thorough evaluation of your finances is needed before you take the leap. Don’t invest because the top investment gurus say so in their webinar. Always assess the situation at hand, and make an honest evaluation of your financial standing. Here are a few points to consider.

– Will investing in a home/property affect your daily finances? In other words, can you continue to live a comfortable life after this substantial investment?

– What is your credit score?

– Is your down payment of 20% taken care of? This is likely the minimum you would need to get financing.

– Have you taken into account the closing costs?

– Would you be able to take on any repair or unforeseen expenses before you rent out the property and be able to make the monthly bank or mortgage payments

– Can your primary residence (if you have one) be used for financing?

If you are hesitant over any one of these points, hold off until your sort the issues and only then invest in a property.

LOCATION IS KEY

Property investment is a long term investment, thus it requires extensive research and planning. You can never research enough while buying your first rental. Job, population and infrastructural growth are the three markers that you should look at while researching for the ideal location. Let’s take a quick look at each of these in more detail.

Increase in the number of jobs: What makes a strong real estate market? Economic stability. What contributes towards it? Increase in the number of jobs in the market. The logic is simple, more jobs = inflow of potential workforce = need for housing + better financial standing = favourable market conditions.

Population Growth: Take any major city as an example, and one of the prominent reasons for the real estate boom in that city is most likely to be a population explosion. When demand exceeds supply, the market is tipped towards the seller and provides the seller with opportunities to capitalise on these favourable conditions.

Infrastructural Growth: The growth of the city and the above-mentioned points go hand in hand. As the infrastructure in the cities gets better, the standard of living and means to earn a livelihood improves, which attracts more and more people to that market, making it ‘THE’ location to invest in.

To find a location that would meet the above criteria requires extensive research and know-how of the real estate market. Getting professional help is recommended.

UNDERSTAND MORTGAGE

The majority of homeowners use a mortgage to buy a property, hence it is important to understand how it works in order to bring down your costs. Using leverage to borrow against will free up some of your finances which you can then use towards repairs and other expenses. It’s best to hire a refinance lawyer to read between the text in order to avoid any legal pitfalls.

DO A THOROUGH BACKGROUND CHECK

You bought a rental to rent it out to tenants, which makes them the significant other in this equation. If you want your rental to work, doing a thorough background check on your tenants is important to avoid future hassles. You can do this by checking their credit score and the landlord-tenant records in your area. Set down certain expectations right from the start, always in writing to be doubly insured. The next step is to contractualise the deal, and hiring conveyancing solicitors to draw up your legal papers is always a good idea, even if it means shelling out a little extra.

MAINTAIN A GOOD RAPPORT WITH THE TENANTS

No one wants a landlord from hell. While it is important to draw boundaries and set rules, don’t be unreasonable. Abide by the local rental regulations. Develop a rapport with the tenants. Help them out by suggesting friendly movers. Don’t ghost out once the deal is closed; be attentive to maintenance and repair requests and always value good tenants. It takes two to tango so make sure you are in tune.

These top tips will help you not only purchase your rental property, but make it a successful purchase that will reap long term rewards!

How To Choose The Right Suburb To Live In

Looking to move? This time can be both extremely exciting and stressful, and often we feel both about the same things! You might be looking for a new suburb to live in because your current location leaves something to be desired in one way or another, but finding a new one to live in can be almost just as stressful as it is exciting. Lucky for you, we have put together a comprehensive list of just about everything you should think about before choosing a new suburb to live in. There’s plenty to consider, so buckle up and dive in to this list of how to choose the right suburb to live in.

First things first, it’s important to list your priorities. It’s way too easy to get wrapped up in a gorgeous house or flat and totally forget about the neighbourhood that it’s in. Sometimes after visiting a new place with a rental property manager, it can be tempting to go on a gut reaction and immediately say you’re interested. For this reason, it’s vital that before you even start looking and getting carried away with your search that you sit down and figure out what’s most important to you.

For example, what comes first in a neighbourhood? Is it safety, or perhaps proximity to work? Are you looking for great schools, or easy access to public transportation? Take some serious time to think about what you want from a suburb, and then rank them from top to bottom of priority.

Let’s go through some of the top priorities you might have.  

What are the crime rates?

This one rings especially true for those who are already in bad neighbourhoods. Perhaps you’ve had to recently install CCTV after a recent break-in or scare, or you don’t feel safe walking home at night, or letting your children play outside after dark. Many studies have shown that “bad neighbourhoods”, or rather those filled with crime or substance abuse and drug use have an impact on children’s behaviour.

For this reason, many families find that a safe and welcoming neighbourhood is the top of their priority list when moving to a new suburb. There are usually free tools online to look at crime rates in a neighbourhood, so get studying to ensure your new home is a safe home. If you will be renting in the new suburb, have a chat with the property manager as well to see what kind of safety the building itself has as well. Are there 24/7 locksmiths available onsite, and how are first floor flats secured, are questions you should be asking.

What’s the distance to family and friends?

Moving away from family and friends can be really hard, especially if you’re moving far. Even if it’s just to the opposite side of town, however, it can be just as saddening if you are currently close to everyone. The ease of dropping by for a cuppa or having a reliable neighbour to keep a spare key to your house is of priceless value, so for some, this is an important priority for moving to a new suburb. Consider what you may lose or gain by moving closer or further away to people you love, and factor that in to your decision.

What schools are in the district?

For most families, choosing a suburb in a good school district is extremely important. Many people move purely for this reason. Start with a website like this one to figure out what schools would be in your new area, and then do your research on the available schools to find the one that works best for your children.   

How hard will it be to move?

Moving to a further away place will be stressful, so determining how hard it will be to move might have a determining factor in your suburb choice. For example, will you need to hire a long distance moving and storage company to help you out? This can definitely make the move easier, but will cost more than you might have budgeted for in moving.

What is the area like?

Remember to spend time in the area before you commit to a suburb. Get lunch at a local cafe, go for a walk in the nearby park and have a picnic. Visit the supermarket if you can, and see how long of a walk it is to the nearest coffee shop. If these are things you love and are used to now, it’s important that you see if this new suburb will offer the same, or if you can get by without things like restaurants within walking distance.

Are there new builds?

For many, the future resale value of the home is very important. Many with this as the top of their priority list might look in a newly developing area, or new subdivisions. Pay special attention to construction sites to see what’s being built, and perhaps talk to the local council to inquire about any new large development plans.

What kind of access is there?

If you plan on relying on public transportation, this one should be high on your list. Look at your basic routes of going to work or the supermarket, and see how long it will take you from the possible suburb. If you do a lot of travel for work or pleasure, look into how long it will take you to get to the airport as well. While it might not seem as important as things like schools or crime rates, we promise that after a few weeks of spending hours on several buses, you’ll have wished you looked this up before.  

Once you’ve completed your list of top priorities, it will likely be a whole lot easier to narrow down the best suburbs for you. Not only that, but with a bit of work in completing your list, you’ll feel much more confident in finding the right area, and secure in whatever choice you make. Good luck with the move!

Perfect House, Wrong Location – How To Make The Most Of Your New Home

It’s the perfect house. It has everything inside you could possibly want, and you are absolutely in love. You know without a shadow of a doubt that this is the one, but there’s just one tiny problem that you can’t shake. You can’t change it, you can’t renovate it, and if you buy this house, you’ll be stuck with it forever. It’s plain and simply, just the wrong location.

For some people, the location of their new house is at the very top of their search lists. They won’t even look outside a certain radius for multiple reasons. Some of us have kids of school age that we don’t want to pull out and move them to a new school. Others refuse to move far from work or family. But there are those who may look to sacrifice the location of their dreams, for the house of their dreams.

For those of you who have found the perfect house, but in the wrong location, there’s plenty of ways to make the most of your new home. Let’s go through some of our favourites.

Up your resale value

If your location’s aesthetic, safety level and/or undesirable features stay relatively the same for decades to come, you might have a bit of a hard time selling it when it comes to that. To make sure that you have got a home that will sell eventually, make sure you complete a meth residue drug test before you even move in. If anyone asks when you go to sell, you can ensure that the home was cleared from meth residue before you moved in, which is a good selling point especially in a bad neighbourhood.

If there aren’t a lot of new houses in your neighbourhood, this is your perfect chance to make your home shine. That way when it comes time to sell, your house will stand out from all the rest by a mile. The exterior will be just as important, if not more important in this circumstance, than the interior. Making a good impression in a bad neighbourhood may help sway a buyer towards considering your home. Think about potential buyers driving through the neighbourhood, perhaps discouraged by the sight of it, and then driving up to your house for sale that’s gleaming with fresh paint and sparkles inside with new appliances. This is vital for selling your home quickly.

For the external, make sure the house is freshly painted before you think about selling, and the landscaping is clean, bright and tidy. Hire a landscape designer to help you out if you’re needing a quick revamp to your landscaping. For the interior, brand new appliances are always a huge selling point. Make sure any obvious fixes are fixed, like a broken hinge, a cupboard door that’s hanging off, or cracks in the wall. These seemingly small things that you have lived with for years can be an instant bad impression on a buyer. Use some of these ideas for increasing resale value as well.

Keep your security up to date

If the neighbourhood is really bad, you might consider keeping certain valuables, documents, jewelry, etc. out of the house. Think about a container rental or other type of safe place away from your home to keep the most important things. Make sure to install a home security system upon moving in. You might consider CCTV installation at the same time to amp up the safety.

Here are some additional tips to burglar-proof your home.

Look to the future

The truth is, nothing stays the same, and everything changes whether we want it to or not. Even if you had found your perfect house in your perfect neighbourhood, there’s no guarantee that in 10 years it’s exactly the location you wished for. Some areas of town that started out rough can turn into gems with a bit of city planning and community involvement. You might even consider getting involved in your local city council to see what kind of difference you can make for the future of your neighborhood!

Stay optimistic

It can feel a bit painful to sacrifice your ideal location for the perfect house, but it’s important that you stay optimistic. Perhaps you had to take your child out of their school and away from their friends. To be honest though, children are extremely adaptable and will surely make new friends and barely be fazed by the move within a year or two. That extra 30 or 40 minutes for your commute to work might be frustrating and annoying, but try to not think of it as that. Use that extra time for listening to your favourite music or podcast (try one of these amazing podcasts to get you started). You might even be able to negotiate different work hours or flexible working with your boss, considering your changed circumstances.

Be positive about the little things, like how friendly the movers were when you moved in, and how you’ll be able to explore a brand new part of town now. There are hidden gems of restaurants, coffee shops and retail shops all over a city, and you might have stumbled upon a heap of amazing places that you just haven’t discovered yet. Get curious and don’t be afraid to explore.

Remember that a bad location isn’t always a bad location for every single person out there. Circumstances change all the time, and while the location can be terrible right now, for you specifically, that doesn’t mean that it’ll always be that way, or that no one will ever buy your home when you sell it. Use these tips to keep your home fresh and updated, be positive about the future, and you’ll start to remember why you purchased this home in the first place – because you fell in love with the house!

The Reality Of Moving – The Good, The Bad And The Just Plain Stressful

Moving into a new home produces a myriad of emotions. Some of us are extremely sad about leaving our previous location, and perhaps it’s a big change that causes a lot of stress. While others of us are beyond excited to purchase that land for sale and begin building the home of our dreams. Maybe we’ve even been packing for months awaiting this day!

The truth is, there will always be good, bad and ugly in the moving process, regardless of your level of excitement for the whole thing. We’re naming the best and the worst bits, but also giving you some tips for both so you aren’t left hanging.

THE GOOD

  • Getting to start over: We humans love a fresh start. Sometimes our lives can get a bit stale and boring, but moving can freshen everything up, just like that. We get a new chance at life, really, with a new neighbourhood and new walls to decorate. It’s a great time to change other things in our lives as well, as we might be more motivated and inspired.
  • Getting rid of stuff: Nothing sobers us up faster than the site of a million boxes filled to overflowing with our things. Packing boxes up to the moving day often inspires us to get rid of things that we’ve forgotten about since the last time we moved, or worse, kept for years on years in a box we’ve never touched! Try some Marie Kondo tips to really get you going on purging things that don’t spark joy.  
  • Exploring new places: Who knows what adorable cafe is around the corner, or a new running path you get to check out? Exploring a new area is one of the best parts about moving, and even if it isn’t a new area, you’re still getting to re-explore and change up your routine.

Tips for enjoying the good:

  • Take photos: Snap a few photos of your old home for the scrapbook, and photos of the moving process as well. This is the start of a new chapter, and it’s always lovely to look back on in the future.

THE BAD

  • Damaged things: Everyone knows how sad it is to get to your new house and realise that prized picture frame broke, or you’ve cracked a whole bunch of dishes.
  • Bad weather for the move: Unless you’ve moved house in the rain before, you really don’t know how terrible the moving day can be! We definitely take for granted a good day for moving until the worst happens to us.  
  • Packing up your life when you still need to use it: If you’ve moved a few times, you know what it’s like to try and figure out what you can pack and won’t need before moving day. It’s nearly inevitable that you’ll pack a few kitchen items only to desperately need them a few days later, and not be able to find them!  

Tips for making it not as bad

  • Use good packing materials: Many of us think we can get by with carelessly packing up our belongings, but it’s just not worth the possible loss if something breaks in transit. It’s much better to be careful the first time around than lose something precious. Buy solid packing boxes and bubble wrap to keep everything safe. Plastic tubs can also be a good investment, especially if you’ll be moving in bad weather.
  • Pack slowly and thoughtfully: Always pack things like knicknacks, books, off season clothing and picture frames/paintings first, and then slowly pack the rest of your house. Pack these things well in advance so you’ll be less stressed closer to moving day.

THE STRESSFUL

  • Kids not adapting well: Kids are surprisingly resilient, but sometimes it takes a while for them to get used to their new school or neighbourhood. They may also be mourning the loss of their old neighbourhood friends, or their favourite hangout.
  • Bad movers: We admit, this isn’t very likely to happen, but it is possible. Every once in a while you hear a story about movers who run off with your things and demand a ransom to be returned, but getting in touch with the police is your first step and allowing them to handle the situation is best. Some movers may not be as careful with your things as you like, or carelessly handle your prized possessions. Avoid this by looking for highly rated and professional furniture movers whenever possible.
  • Things aren’t quite as they seemed: It happens to the best of us. Sometimes when we view a flat or house, we see it in a certain rose coloured glasses rather than reality. Maybe we misread the building report on that piece of commercial property for sale, or didn’t take it seriously. If you didn’t have a list with you while viewing places, you might have not even noticed that the new house didn’t have any storage, or you saw the place at night and didn’t realise it gets no natural light.

Tips for making it less stressful

  • Stay positive: Moving takes a lot out of us, and it can sometimes take a month or two to get used to the new surroundings. Kids adapt quickly, and even if they aren’t happy about the move, if you stay positive and employ some of these tricks, they’ll be making new friends just like that.
  • Adapt to the undesirable: While you can’t change the amount of natural light you get, you can change the lighting. Things like limited storage and closet space can be mitigated by buying fashionable wardrobes and shelves, so don’t give up on the new place just yet!

Overall, remember that you aren’t alone in your moving woes. We can probably all find something good, bad, and just plain stressful from our last moving experience, so try and learn from this article and your previous moves, and remember that it will get better eventually!

Top 7 Things You Need To Know About Buying A Rental

The idea of having a property that makes money on itself without you lifting a finger is one that many people dream of. “We’ll just buy a property, rent it out, and it’ll pay off the mortgage and we’ll make heaps of cash”, is what many people say about a cash cow like a rental property. There are some truths to this, if done right, but there’s also a lot of reality that we’re missing. To bring you back down to earth, and to realise what you might actually be getting yourself into, we’ve put together some of the top things that you should know about buying a rental property.

We don’t write this to scare you out of buying; rather, the opposite! Rental properties can be extremely lucrative and can help boost your retirement savings and capital. But it is important that you know what type of work you can expect.

You’ll want a thorough budget

Let’s start with one of the most important things, first. Budgeting correctly for your own home is difficult but incredibly important, but budgeting for a second investment property like a rental is even more important. You aren’t just looking at whether or not you can afford the mortgage or having money set aside for a big repair, you also need to include what will happen if you don’t have tenants right away, or if you’re slapped with high taxes on the rent money you receive. Do your research, and talk with a financial advisor or even another rental manager if possible to get their insight.

Your budget will also need to include little things like when you have to hire out a carpet repair specialist in between tenants, or the cost of rental furniture to furnish a flat initially. Consider also the taxes on the building, like council taxes, as well as any utilities that you aren’t charging the tenant.  

You’ll need to be able to pay two mortgages

The truth about rental properties is that there will always be a time when you’re paying two mortgages. Hopefully this is an occurrence that’s few and far between, but please make sure your budget is prepared for this. Even if it’s just one month in between one tenant moving out and another moving in, you should have plenty of room in your budget to cover this. We recommend having at least 6 months of the second mortgage covered, in case of long term repairs or a slow rental market. If you decide to work with a property manager instead of doing it yourself, they will likely have something written into the contract about what happens in these situations, and may cover you for a while.

You need to do a lot of research

The location and type of rental property you’re getting will decide what types of tenants you’ll get, so it’s something you need to think about. If you’re looking to attract students near a university, you’ll need a rental property that will suit them well, like small studio apartments that you can rent out at lower cost. Getting a rental appraisal will help you decide what rent you can get out of the property.

You might need renovations

If you aren’t buying a ready to move in property, be prepared to foot the bill for some reno costs. For easier renovations, you could consider doing them yourself too. Here’s a list of some renovations you might be able to tackle regardless of your experience. Basic renovations when buying a property might just be updating flooring or painting the walls, or it might be more extensive like replacing some plumbing in units.

You’ll need to write a lease

If you’ve never written a contract before, this one might seem a bit daunting, but it’s important to get right. You’ll want a strong lease that explains the ins and outs of the tenancy, as well as stating exactly what the terms and conditions are. It’s also important to include sections on what happens if a tenant needs to break the lease early, or other situations like that. That way, you both will be covered under the agreement.

You’ll be screening tenants

The tenants you have in your property should be responsible, pay rent, and alert you to any issues in the flat. It can be overwhelming to figure out who is going to be a good tenant, and still follow the tenancy laws at the same time. Here are some good tips for avoiding a bad situation with tenants.

Again, alternatively you could use a rental letting agent to take care of this for you. Many property management companies are well experienced in this process, and have access to background check software and may be able to perform a more extensive screening than you are able to.

You will be responsible for maintenance

Those midnight emergency calls about the toilet overflowing and the tenant can’t stop it are your calls to take now, good luck! In all honesty, these types of emergency calls won’t happen that often, but you will get calls about plumbing issues, something breaking, or other random maintenance often, and you’ll need to be prepared for it. If you’ve got a small property, it may be easy to keep up with the repairs yourself. For larger or multiple properties, you might need to look into hiring a maintenance company or person to manage the maintenance. If you’re lucky, you might also have a handy tenant in your property that could manage maintenance in exchange for reduced rent.

Okay, so maybe this is a lot to think about and it a bit scary, but if you can nail down these seven things than you’ll be in a lot better position to buy a rental property. Awareness is the most important thing, so simply being fully aware of the things that can go wrong and having a contingency plan for them will ensure that your rental property is a success, and that you’ll actually turn a profit from it.

How To Write A Lease For Your Rental Property

If you’ve decided to rent out your property there are a number of channels that you can go down to make sure that both you and your tenant are protected. Your tenant will have most likely have looked through a number of houses for rent and they will have looked into some key areas for their peace of mind. They will want to be sure that all the relevant testing for the property and the lease agreement is of a good standard and adheres to all relevant rules and regulations. If you are the type of person that wants to take on all aspects of letting out your property yourself, then it is important that you make sure that all these aspects are covered in your lease agreement.

If an estate agent or letting agent has taken on board the letting of your property this will usually have taken care of this aspect. If however, you have decided to let out your property yourself without the help if any professionals then you will need to ensure that you have this included in the lease. Typically meth testing comes at the beginning or end of a lease, if suspected, so having a caveat about your right to test is important.

  • Writing the Lease

If you are renting out your property the lease document between yourself and your tenant needs to cover the basic aspects that the tenant is responsible for and vice versa. It should outline the duties of each party so that you both understand what is required of each other. Having a well written lease is vital to prevent future problems which may otherwise occur.

  • Formatting

Across the world there are a number of sites that will offer you a free template which will provide you a guide of how to correctly write a lease document. A lot of local governments have standardised documents which you can copy.

  • Document Title

It is important to get the right title for your document. Having a title such as ‘lease’ would be okay but titles such as ‘lease agreement’ or ‘rental agreement’ are a better choice. This title chosen makes it much clearer as to what the document is about.

  • Headings

It is important to have a number of headings on your documents in order for it to be clear. Headings such as ‘term’, ‘rent’ and ‘property’ are all examples of titles that you could use. You can also even include a subsection which outlines the tenant’s responsibilities and the landlord’s responsibilities. Be sure to bold the titles so that they stand out and are clear.

  • Provisions

On your document it is worth having a key which defines the document. A good example of this is to describe the word ‘rent’ so that it is explicit what is meant by rent.

  • Signatures

Once the document has been completed don’t forget to leave a section for any signatures. The main signatures that will be needed are the tenant’s signature and the landlord signature.

  • Checking the Law

This may sound like an obvious point but making sure that you adhere to all the local laws is crucial. If you innocently violate the law, you may invalidate your lease. The lease also needs to state the amount of rent that you will be charging and the frequency in which you will be charged. It is also important to advise the tenant of any other charges that may occur. Finally, don’t forget to state the length of the lease.

  • Other aspects to include

On the lease you need to state where the rental property is located and if there are any other areas of responsibility. For example, any gardens or out buildings.

  • The occupants

As the landlord, you’ll need to be aware of who is renting your property. You can list the names of any tenants on your lease. This will protect you if for example the tenant does not pay the rent.

  • Agreeing on the rental length

As briefly mentioned above, the lease should contain a set time of how long the property will be leased for. Typically, a lease agreement is between six months and a year. That said, a short lease agreement can be possible too. You might want to add in a section on what would happen to the tenant if you put up the property for sale as well.

  • Rent due date

The date that the rent is due to be paid can be added onto a lease agreement. Somewhere in the lease you also need to state any deposits that have been paid, and who they’ve been lodged with.

  • Bills

As part of a lease agreement it is a good idea to incorporate a section on the domesticated bills. State what the tenant is responsible for and make sure that you take accurate readings of any meters at the house before the tenant moves in to the property.

  • Deposits

The deposit that the tenant pays should be documented, as mentioned above. A deposit is necessary in order to protect you from any damage that may occur to your property or your belongings within property whilst being rented. The deposit needs to be kept safe for when your tenants leaves so that you can return what is owed to them.

  • Late Payments

On a lease agreement you need to outline the procedures for any late payments. This will help you should you ever need to terminate a lease agreement.

  • The completed lease

Once your lease has been written and signed, your tenants are free to move in. Get your tenants to contact their moving company or shipping container house so that you can organise the start date of the agreement. It is worth discussing this with your tenants as some tenants like to have the house available a few days before they are ready to move their belongings in to it.

Writing a lease does not need to be daunting as long as it’s kept simple and all of the above steps are incorporated. The agreement is not there to catch anyone out, it acts as a legal guide to ensure that all parties are aware of what is expected of them, and protect both you and your tenants for the future.

How To Find the Best Tenants For Your Property

Finding the best tenants for your property can be a daunting task. Although somebody may seem okay initially, it’s impossible to judge what type of tenant they will make. From the tenant’s point of view, they will be looking for a number of attributes in a property that will suit their needs. They will judge your property on a number of aspects which we will cover shortly. For you, as the landlord, here are a number of ways to seek out the ideal tenants.

Referencing

Referencing your tenants can be done in a number of ways. The first way would be to run a criminal background check. Although we hope that any criminal convictions will be spent, the type of convictions or the fact that they have been convicted in the past, may give you an insight in to the type of person you may be dealing with. Secondly you can choose to conduct a personal reference. Personal references can often be sought from a friend of the tenant or an employer. Although referencing may not directly point you to the type of person the tenant is, it will give you snippets of the type of lifestyle the tenant lives and you can then decide if this suits your property or what you are looking for in a tenant.

Credit Checking

As with any investment, you want to ensure that you have a regular yield. Therefore, it is worth checking a potential tenant’s credit score as you will then be able to see if they will pay the rent on time. This gives you the peace of mind that they are financially secure. It is by no means a guarantee that they will pay, but it does help you to build a background picture of the tenant.

Adhering To The Law

It is important that both tenants and landlords follow the rules and regulations that have been set by the local governments. When looking for the ideal tenants, the tenant will also expect to be treated fairly as well, as after all, it is a two-way process. If a tenant feels valued then there is more chance that they will respect your property in the way that you wish for.

Rental History

The rental history of a prospective tenant will show you what type of tenant they have been in the past. Try to look for the reason as to why they are moving house to make sure that they are not just moving from one property to another.

Creating Rules

When you embark on renting out a property, having some rules in place will make sure that your tenant is fully aware of what is expected of them. There is no point in assuming your tenant will know what you expect from them, you need to make things clear and black and white. Consider aspects such as:

  • Will you allow pets in the property?
  • Does the décor in the property need to remain as it is or can it be changed?
  • Do the ages of any children in the property matter? If so what are your requirements.

Stability

You need to check to see if your tenant is in work and if so how long have they been working there for. Ask a prospective tenant questions such as:

  • Have you moved in the last 6 months?
  • What they earn as you need to make sure that they can comfortably afford to pay the rental amount.

Go With Your Gut

When you have met a prospective tenant, it is human nature to make an instant judgment. If you get a bad feeling about a tenant then it is prudent to shy away from this tenant. Your basic instincts can often guide you. Again, it may not be a fair way of deciding between tenants and it is still very easy to make a mistake, but your instincts are not often wrong.

As you can see there are a number of ways of seeking out a good tenant. Another aspect to consider is what a prospective tenant will get from you and their expectations. Here are some examples:

Cleanliness

If you take a look at the outside of a property and it is full of moss and in poor state of repair, it is worth hiring a moss removal treatment company to make sure that the appearance of the property is at its best. The same can be said for the guttering on a property. Gutter cleaning will show a prospective tenant that the property has be properly maintained. You also need to take a look at the doors and the windows of the property. Most of us will get the outside of the windows professionally cleaned but it’s also important to remember that if you have an interior window which has any damage or fogging or is dirty, this needs some attention. As remember a tenant spends most of the time inside the property not outside.

Security

Tenants now look for a high level of security within a property. Having window and door locks and alarm system has fast become the norm. If, however you do not have an alarm in your property, getting one fitted is highly advisable. Alarm installation doesn’t have to be costly, but the more advanced that your system is, the more marketable your property will become. Consider add-ons such as panic buttons and alarm monitoring as these will show your tenants that you take security safely.

By taking the above advice in to account you can see that there are steps to follow when it comes to selecting the best tenant for your property.

Top Tips For Budgeting Before You Purchase A Rental

If you are considering purchasing a rental property as an investment, then first off, congratulations on this exciting decision! To start, you’ll definitely need to look at property to let and scour local real estate companies. By doing this you’ll start to gain an idea of the type of rental yields that you could generate from your rental purchase. But there are many more aspects to consider before you contact a house lawyer, as you don’t necessarily have to buy a pre-existing property; you could also look for bare land for sale which you could either rent out or develop and put a new dwelling on it. Let’s now take a look at some top tips to consider before you go ahead and purchase a property for rental purposes.

Finance

To finance your rental property, it is vital that you get your personal budget in good order before you contact a refinance lawyer. Doing this will give your lawyer the head start in being able to find the best deals for loans that you may require to purchase your rental. It is not just about being able to afford the purchase of your property, you also have to factor in a contingency budget for any fees or repairs that may be required. It also advisable to know where to cut back when it comes to your personal finances as this is a great way of generating extra income when needed to do small things in your rental. There are specific aspects of finance that you need to also consider before purchasing a rental:

Tax: Make sure you factor in any miscellaneous tax expenses that you may come into. It is worth remembering that rental income will affect your income tax.

Own Household Expenses: Getting a handle on your utilities and household bills is a good way of formulating a strong budget. The less that you incur per month on your own domesticated bills will help you to cover the months where your rental is vacant. Remember you will still have to pay for the utilities at your rental property even when you don’t have tenants.

Debt Clearance: You are still able to purchase a property even if you have debt against your name, but it is much easier if you clear your debts as best as you can. It allows lenders to see that you have a good control of your finances and it will also give you the opportunity to borrow more money at a lower rate.

Be Realistic: Don’t suffer with delusions of grandeur. Be realistic about the amount of money that you can afford to spend on a property. It is far easier to keep within your means and build your portfolio if you keep a cap on your spending. If you spend too much initially, you may struggle to keep up with the payments on those inevitable vacant months.

Getting Approved: Getting approved can be given an increased chance of success if you have a strong case to present. It is very easy to slip into simple traps which could ruin your approval rate. Get advice from industry experts about the best way of achieving your goal.

Picking Your Rental

It is worth doing thorough research on where you will purchase your rental property. Don’t get carried away with houses that you like for yourself. Try to buy sensibly and look for properties that will give you maximum yield with minimum investment. Check locally with the rental market and if you have a high percentage of families looking for rentals then properties suitable for families are what you should aim for. The same can be said for professionals, look for apartments, flats and smaller self-contained homes that would suit a professional couple.

Look for local amenities, schools, shops, pubs and restaurants which will all appeal to the average family renter. Having poor schools could put off potential tenants if they have school aged children. This is a very important factor to consider.

Type Of Property

If you are the type of person that is very handy around a home, then an older property could be suited to you as you will be able to keep up with the maintenance yourself. However, if DIY is not your thing, then a new build property with minimum maintenance may be more suitable for you.

Investment Length

Decide on what type of investment your rental property will be as there are many different options that people use:

Buying For Yourself: It is not uncommon for people to buy a property and then get tenants in for a set amount of time so that they can cover their mortgage costs and make a small amount of profit.

Buying Purely To Rent Out: You may have the intention of renting out the property for the duration of your mortgage term. In turn, this will give you an asset which has been paid for by your tenants. You then have the option to sell your property for a profit or just add the property to your portfolio of rentals.

Completing The Purchase

Once you have taken in all of the above aspects into account, you are now ready to complete your purchase. Try to focus on sticking to your budget and making sure that your rental purchase goes through without any hitches. As soon as you have tenants for your property you’ll have to make sure that you keep that property in a good state of repair so that your tenants will enjoy living there and rent for the full rental term. As part of an ongoing budget it is important that you make sure can cover the mortgage payments. In the event of your home being vacant for a length of time, this will give you the peace of mind that you need when renting out property.

So before you go ahead and purchase and rental property make sure that you take our top tips into consideration to stay within your budget.