Avoid these pitfalls when buying rental property
Category Principal's Message
While investing in rental property can offer excellent rental returns, there are some pitfalls that you should be aware of.
It is important to understand this and if you are looking at investing in a rental, that you do so with a long-term view, not just in terms of the property value to be had, but also how you could hold out during an economic downturn.
Be aware too, that not all properties or areas offer good rental investments and it is therefore vital that you do your homework before leaping into such a vast financial commitment. The non-negotiable rules for investing in property:
Location
Properties in areas with good schools, amenities and convenient access to business and commercial nodes tend to be the most in demand, regardless of the state of the economy.
Affordability
Generally, the more affordable property ranges tend to be most in demand regardless of the economic cycle.
Property configurations
Together with location, security has become a vital requirement for tenants. That means security complexes and secure neighbourhoods tend to be most in demand.
Holiday versus residential versus student rentals
Each type of rental is unique. Student accommodation for example might be most popular in two or three bedroomed configurations because it allows for sharing. The most popular holiday flats on the other hand might be one and two bedroomed units.
Supply and demand
Just because an area has a very busy rental market, does not necessarily mean that it requires more rental stock, especially under weaker market conditions. Be sure to check how sustainable the demand will be in future.
Tenant management
Ensuring that you have good tenants who will look after your property and pay their rent on time, is critical. Unless you are in the business of property rentals, it is best to work with a credible rental agency who can ensure that your tenants are properly vetted.
Author: Property 24
