It’s a common piece of advice: if you’ve got some money, invest in property. The property market can fluctuate hugely and making a successful stab at growing a rental portfolio is a long way from guaranteed. But, it is a generally accepted fact that investing your wealth in assets such as rental properties is a smart move. Plus, you can become a landlord by renting out properties.
The following five steps are essential for climbing the property ladder and starting to see regular income roll into your accounts.
The first and most important stage of becoming a successful landlord is to purchase a property. Be it a house or an apartment, choose a property you believe will return a significant yield. Meaning, the percentage of the property’s value that is charged in rent annually once it is brought up to a rentable standard.
To do this, you will need to have a significant amount of money to spend. In many countries, such as Canada, there are currently fewer houses for sale than usual. This means prices can rise, and it is more difficult to make the right choice. Across the United States, the median home listing is sitting around $225,000. Yhe state with the most expensive median property price is Hawaii, where homes tend to sit at over half a million dollars, while the least expensive state is West Virginia.
Choosing exactly where to invest your money is therefore key. In a cheaper state, you may be more likely to find a property that requires less work for less initial outlay. Thus, giving you a better chance of achieving a high yield.
Once you have purchased your property, there is a significant chance that you will need to carry out some renovations. Where properties need a complete remodel, including kitchen and bathroom replacements, average costs can be upwards of an additional $75,000. Of course, not all renovations will need so much work. These can be put on the market much sooner and at less expense.
The importance of a successful and affordable renovation is why so many builders and laborers go into property letting. Being able to do the work yourself and having contacts who may owe you favors or be willing to give you a discount is a huge advantage.
Real estate agents and property marketers have moved a long way from simply posting a “To Let” sign outside a property – though the transition was already happening, experts claim Covid-19 has accelerated the rise of digital advertising and marketing being used in the property market.
This means that online marketing to generate leads is an essential aspect of being a landlord to embrace once you have bought and renovated a property. Find online property experts who can help you with this if it is unfamiliar territory.
Whether you’re looking to own and rent out a residential home or a commercial space, you must look into landlord insurance. This can be bought on a long or short-term basis and should be discussed with an advisor to make sure everything is covered that you need to be. This includes, but is not limited to:
Once insurance is in place to cover the wonderfully renovated property that you are now the owner of, it is time to start making a name for yourself. Property agents will help you with the digital marketing of your property, but if you are looking to become a high-flying property magnate, then you need to market yourself, too.
Property shows such as Selling Sunset and the rise of landlords using Tik Tok and other social media platforms to promote their work are trends that show that people are becoming just as interested in the property owner as they are in the property.