Let’s say that you’ve got a few grand spare.
You are perhaps considering putting the money into a long-term savings account or bond. The only trouble is; savings accounts don’t pay much interest. After keeping your money locked away for a few years, you might be lucky to have enough extra cash to pay for your weekly grocery shopping!
As you can imagine, savings accounts are no longer the first choice for people that want to make their money work for them. If you wish to get a bigger return on your money, what should you do instead?
Well, one thing you could do is to consider buying places to rent out. Property investment companies are reporting a surge in the number of folks investing their cash in bricks and mortar.
That’s because people see decent returns on their investments. Despite the turbulent economy, people still need somewhere to live. And because many of those folks can’t afford to buy a house, they’d rather rent instead. This is where you as a property investor can make some money!
If you’re thinking of having a go at property investment, check out these practical tips to help you get started. Don’t worry; you can thank us later!
Put some of your money aside in savings accounts
You might think I’m not talking much sense here, so let me explain. First, if you put some cash into an ISA, you won’t have to pay any tax on your returns. And, second, mortgage lenders like to know that you’ve got some backup cash for a rainy day.
Do you and your spouse want to start a property investment venture together? If so, you can both use your ISA savings limits to earn extra tax-free money.
Research the market
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Now that you’ve taken care of that, the next thing to do is some research before you make any decisions involving lots of money!
It’s important to put yourself in the mindset of a potential tenant. Here are some of the things you should consider before making an offer on any properties:
- Location – how easy is it for people to travel to the area by road and public transport?
- Amenities – is it near places like schools, shopping centres and hospitals?
- Internet – can you get high-speed ADSL and fibre broadband?
- Crime – you want to avoid areas with high crime rates.
Sometimes it can be hard to find the “perfect” property while keeping the above criteria in mind. Some folks prefer to enlist the help of property investment companies. That’s because they’ve got expert knowledge when it comes to finding places in desirable areas.
Shop around for the best mortgage
While you’re looking for a suitable property, you should also look for the best buy-to-let mortgage you can get.
Despite what others may tell you, all the major lenders are still giving money to people that want to rent out their properties. Here are some tips to help you get the best deal:
- Check your credit record – if you owe too much credit, you might not get approved by mainstream lenders;
- Do a mortgage comparison search – just like you would with your car insurance;
- Have a big deposit to put down – the more money you can pay upfront, the lower your interest rates.
Now that you know what to do, it’s time to get cracking! Good luck!
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