If there is an amount of savings in your bank account and thinking about property investment, it’s always better to get started now instead of later. Most of the people buying their first homes for their own stay instead for investment uses, and this houses are just become their liability which they need to working hard on their work to pay for the loan instalments. On the flip side, if your first home is for investment uses, this house can make profit to you.
Renting is one of the safest investment strategy in property investment. You can earn a passive income as well as can bring reliable cash flow by rent it out to tenants. If you are ready to be a landlord, you’ll have to master how to spot a potential investment property. Here are 8 tips to help you decide which house that you should invest in.
Tip #1: Look for urban areas
There are also have a lot of investment opportunities in urban areas. A high potential investment property always nearby shopping mall, restaurants and public transportation. Keep in mind that always choose a location that renters will find convenient.
Tip #2: Research for the job market
When people have a steady job, they can afford to buy or rent a house or a room. So demand for rentals is higher in strong job market. You can whether target on expatriates or local workers. Always investing in a market where there is a strong workforce and hosing is needed.
Tip #3: Look for school and university district
An area with a good and university district always show an investment opportunity. If you investing in rental property nearby school, college or university, your target renters would be students. And you’ll no need to worry you can’t find a tenant, as there are always have a bunch of student looking for place to rent.
Tip #4: Look for a house that have more bedrooms
There are 2 types of properties, one have 3 bedrooms and the other one have 6 small bedrooms (but not feel cramped), and these 2 types of properties are same size. Think about it, a property with 6 small bedrooms can rent to a group of students or working professionals for RM 2,100 a month (each contributing RM 350), while if you rent out the 3 bedrooms property to a family, they would pay only RM 1,200 a month. So, which one is make more sense?
Tip #5: Ensure your property is occupied
There is one thing that all the landlords will worry about, that is, can’t find tenant. Therefore, before invest in any rental property, do the proper due diligence to ensure that the property is high demand and can immediate to find tenant to fill the vacant room. Always do your homework!
Tip #6: Engage with property agent
A local property agent can help save you a lot of time to searching potential property. And thus do engage with local property agent who is familiar with investment property, the areas, contractors and a property management company. They can search the appropriate properties according to your requirements. They’ll also help you spot if a possible investment is actually a money pit in disguise.
Tip #7: Choose the low-maintenance houses
By investing in the qualify fixtures, finishes and systems you can save money on maintenance costs int he long run. Before buying a rental property, do hire a property inspector to inspect the property from the top to the bottom to get to know how much costs you going to spend in this property. If its repair costs exceed your budget that you’ve set earlier, it’s better to go away and look for other property with well condition (preferred ready-rent property).
Tip #8: Know how to do the math
To determine whether you will potentially make money on your investment property, you should know how to calculated it.
If the rent is 1% of the sale price, it’s worth to invest in this property. For example, if you buy a property for RM 100,000 and rent should be at RM 1,000. Besides, if you taking loan to finance the purchase, you’ll have to make sure that your mortgage payment is less than 50% of the rent. Otherwise, you are slated to make little to no money over the long run. By checking the rental, you can talk with the nearby homeowners or ask your property agent about the recent rent market in the area.
It’s not about property ownership it’s about control! To get more details. Click Here!
Like this article or found it helpful? Share it!
Follow us on Twitter for more news, tips and inspiration. Become our mate on Facebook and explore our Pinterest boards.