Buying to let represents significant opportunity, but you have to make the best investment decisions. Before you become a savvy investor, you have to make it out of the gate unscathed. You want to build up that investment portfolio, but it’s going to take time. Property investing requires patience, and that is something you will have to think about. Here are 5 secrets about buy-to-let investments that you need to know from Sterling Woodrow.
Are you familiar with the one percent rule? This rule is one that you need to try and stick to as a standard. Yet you need to know more about it before you’re able to do that. Sticking to the rule will help you better make investment decisions and manage your business finances. So what is this rule?
It is all about the rental income per month for your property vs the amount of your investment. For example, let’s say that you invest $200k in a home. According to the one percent rule, you are going to want to see an income of $2k per month on that property. As you learn more about property investing, you will see why that rule should be in effect.
When you are looking for good buys, you also don’t want to forget about property taxes. Property taxes are a consistent responsibility when you are buying to let, so you need to be prepared to handle them for sure. One thing you don’t want to do is get a surprise that you’re not expecting when it comes to your expense in relation to property taxes.
Here is another one of the 5 secrets about buy-to-let investments that you might want to consider. You’re just getting started, and you want a good property at a discount. That doesn’t mean you want to purchase one that needs to be fixed up. If you do that, you could get yourself into quite a pickle. There is nothing wrong with a fixer upper, but they are usually for more seasoned investors. These people are used to doing the extra figuring, and they also have all the contacts for cheap repairs.
You could really find yourself in a difficult situation if you bite off more than you can chew. Keep that in mind as you look at property investments and decide whether or not to buy fixer uppers. You also want to be sure that you look at more than just the properties themselves. The area in which they are in is also important. You need to know information about the neighbourhoods, and that includes how much properties in the area are selling for.
One more secret to keep in mind is that there are always unexpected expenses. That means you definitely need cash reserves so that you are able to handle those types of expenses. It’s a good idea to network with other investors, too, so that you can learn all the tricks of the trade so to speak. If you are ready to jump into the world of buy-to-let investing, opportunity awaits.