Should You Buy an Investment Property?

 Buying an investment property is a long-term investment that many people are now considering. There are many reasons to buy an apartment as an investment, including the fact that it will provide you with a fixed asset. Investment property can be seen as a good alternative to other investments, such as stocks and bonds. This type of investment is less risky than stocks or bonds, but can still provide you with appreciation in value over time.

Investment properties are often bought with a buy-to-let mortgage that is designed for people who want to use their home as collateral for loans. Potential buyers should consider the purchase price, the rental income, repayments on both loans, and any other expenses before deciding which type of property to buy. If this is something that you’re considering doing, we’re now going to run through what you need to keep in mind to work out whether it’s right for you.

The Investment

First of all, when you make an investment in a property, it’s likely that you’re going to want to get a buy-to-let mortgage. It is a property loan that lets you purchase a property as an investment. You can then rent out the property you own and make money from it.

 

When it comes to calculating the amount of money you will need for an investment property there are two main components that need to be considered. There’s the purchase price and your deposit. The downpayment on an investment property is typically 25% of the purchase price but can vary between lenders (and depending on the climate and circumstances etc). It may also depend on the cost of the property, so bear these factors in mind.

Renting It Out

Renting out your property can provide a passive income stream. You can rent it out to students, international workers, or people who are looking for temporary accommodation. The process of renting out your property starts by finding a tenant that meets your requirements. You then work with them to create an agreement that outlines the terms of the rental - length of stay, rent, and any other details that may be necessary.

If you need help with deciding on what type of contract to use, you can find a list of possible types of contracts online. But you could turn to letting agents for help too. Then, you can also get tips on how to prepare for your first tenants and how to manage the property too (or get them to do it).

Adding To Your Portfolio

A property portfolio is your collection of properties that you’ve bought and the total number of properties you own. It can be a single property, or many properties. It's never too late to start building a property portfolio if you've been thinking about it for a while. The best way to begin is by starting with one residential home, renovating it, and building up from there. So now, maybe it’s time for you to think about picking up a second property or planning for when you want to.