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Getting Started In Property With Buy To Let
When you are investing in buy-to-lets, in the right area, you are looking at a slow but steady property growth.
Now, the buy-to-let strategy can work very well, but there are problems associated with it. For instance…
When you are investing in buy-to-lets, in the right area, you are looking at a slow but steady property growth.
Now, the buy-to-let strategy can work very well, but there are problems associated with it. For instance…
Below Market Value Property
As I mentioned, capital growth on buy-to-lets, in the right areas, is slow and steady.
This can be a problem.
If all your funds are tied up in your investments, then growing your business quickly will be very difficult. This is because you will have to wait a long time before you are able to sell your property at a profit.
When you are investing in property, having an exit strategy, is key.
One option would be to go through a refurbishment process and add value to the property that way.
Another option is to make sure that you only ever buy buy-to-lets at a decent discount. That is to say, you make sure that you only buy property at below market value or at less than you are sure you can sell for, immediately.
You should always hold some equity tied up in the deal.
But, you need to be careful here. Securing properties at below market value is important but, in the long term, your rental yield is going to be much more vital.
The trick is to always try and close your deals at a number that is below market value. But, don’t focus on this element to the exclusion of all else.
Remember, a great discount on a house you can’t find tenants for or can’t sell, will sink you as fast as any other bad investment.
What I was focussed on was the potential for capital growth and on securing the property at below market value.
I didn’t have contacts in the area who could tell me if it was a good or bad street or a good or bad postcode.
From working as an estate agent I thought I had picked up a few fundamental skills but the reality was they fell short of the mark. Whereas I knew the area I had worked in as an agent very well, I found that in a new area I was flying blind to a much greater degree than I had anticipated.
As I mentioned, capital growth on buy-to-lets, in the right areas, is slow and steady.
This can be a problem.
If all your funds are tied up in your investments, then growing your business quickly will be very difficult. This is because you will have to wait a long time before you are able to sell your property at a profit.
When you are investing in property, having an exit strategy, is key.
One option would be to go through a refurbishment process and add value to the property that way.
Another option is to make sure that you only ever buy buy-to-lets at a decent discount. That is to say, you make sure that you only buy property at below market value or at less than you are sure you can sell for, immediately.
You should always hold some equity tied up in the deal.
But, you need to be careful here. Securing properties at below market value is important but, in the long term, your rental yield is going to be much more vital.
The trick is to always try and close your deals at a number that is below market value. But, don’t focus on this element to the exclusion of all else.
Remember, a great discount on a house you can’t find tenants for or can’t sell, will sink you as fast as any other bad investment.
What I was focussed on was the potential for capital growth and on securing the property at below market value.
I didn’t have contacts in the area who could tell me if it was a good or bad street or a good or bad postcode.
From working as an estate agent I thought I had picked up a few fundamental skills but the reality was they fell short of the mark. Whereas I knew the area I had worked in as an agent very well, I found that in a new area I was flying blind to a much greater degree than I had anticipated.