Owning a second property and renting it out to tenants is a great way to earn some extra funds each month, but in order to create substantial wealth you will probably need to invest in more than one buy to let property.
In today’s world of fast paced digitalisation and convenience, it’s easy to fall into the trap of looking for a way to make money instantly. However, the best investments are the ones that build over time and lead to an appreciation in capital growth that can see you through to retirement. This is what property investment needs to be if you want to find true success as a landlord.
The age-old debate among property investors is whether you need to aim for quality or quantity. Should you be looking exclusively for high-quality investments which you can keep on for the long term and rent out to tenants who are hopefully happy to stay for the foreseeable future? Or should you focus on investing in as many properties as possible, doing them up quickly, and then selling them on for a profit? Well, that could be an option if you are in desperate need of money. If that is the case, you can sell the renovated house to a real estate company as well that might buy the property for cash (similar to https://webuyhousesinatlanta.com/, for instance), but if that’s not the case, then keep the property to generate regular income by renting the place.
Moreover, selling or keeping the flipped property could largely depend on what kind of landlord you want to be and where your interests lie. If you’re talented at renovation but have little interest in managing tenants, then you may be more suited to a quantity approach to property investment. However, we would argue that the most effective way to secure long-term financial stability is through an elite collection of high-quality properties that lure tenants in. Even if you consider yourself a ‘flipper’ (someone who purchases properties only to do them up and sell them quickly), you should still aim for every one of your investments to be of a certain quality standard.
To decide on the standards, you can gain some professional insights and look for villas and bunglows in your locality, especially getting sold at lower price. You could consult a realtor for these information, who you can find on websites such as https://reali.com/sacramento-real-estate/ or look for similar companies in your locality. Investing in property can help in diversifying your portfolio, and for that you may have to do a thorough research on risks involved with such assets.
How do you build a diverse property portfolio made up of high quality investments?
The process of investing in quality properties can be broken down to a series of simple steps:
- Assess your financial situation and set realistic budgeting goals. Make sure you set aside enough finance to cover any surprising maintenance or refurbishment work that needs doing.
- Speak to a mortgage broker to get an estimate of your borrowing capacity.
- Pick a property strategy which works for your budget, interests and situation.
- Research areas, prices and properties in order to gain a clearer idea of the area you would like to invest in. Do you want somewhere nearby for easy access? What local areas are set to receive a boost over the next few months or years?
- Search for a high quality property and select one.
Of course, there are numerous factors that can complicate this simplified set of steps, but that is the general gist of what you will need to do. When choosing a property, consider whether your end goal is to sell it on quickly or rent it out to long-term tenants.
Make sure you set clear objectives and stay accountable. Investing in a range of different areas, sectors and markets can help provide security should something change within the property market, but whatever kind of property you go for, make sure it is high quality. For example, as a way to diversify, you could look at Colorado ranches for sale and consider investing in them. Having a pretty big farmland in your portfolio can definitely be an asset in the long run, whether you want to live there, rent it out, or sell it. Don’t rush into buying too many properties too quickly, as this can lead you to sacrifice valuable research and advice in favour of a quick fix which may not pan out.
Of course, property investment of any kind can be an expensive venture. That’s why you need to understand all of the funding streams open to you. Whether you approach your bank, a building society or a bridging loan provider like Glenhawk, it is always worth exploring a number of different options before making any decisions.