Finding the right rental property to invest in
Hutchison suggested doing a pro forma analysis on the property you’re looking to buy.
Purchasing a rental property is a major investment and can be a lucrative one. But before making a final decision, take a step back and do some research.
Craig Hutchison, from Engel & Völkers, said that it is important to take precautions when deciding to invest in buy-to-let property.
“Take your time, look around and seek advice. Do your research and understand the market. Chat to a professional real estate company about what they have on offer that both suits your budget and your long- and short-term needs.”
There are a variety of consumer types who seek the benefits of renting property, rather than owning it. Each consumer profile requires a specific type of property in a particular area and within a definitive budget.
Students, for example, require property that is walking distance to university for a period of between three to five years. The property needs to be affordable, small and have one to two bedrooms if students intend on sharing. Fully furnished is also preferable.
Corporate businesses looking to accommodate international consultants will need an entirely different type of property. This property needs to be upmarket, situated in a central business district close to the corporate offices as well as malls and restaurants.
Singles are consumers who have started their career and are building towards purchasing their own home. They prefer the lock-up-and-go lifestyle, so an apartment in a newly built development where there is access to a clubhouse, laundry and gym is ideal for this tenant.
“Look at similar properties in the area, research how the rents have changed in the past five years and how they are projected to change in the next 10 years.
“Calculate the estimated maintenance and operational costs and you will have a better understanding on how much net income the property would generate and what the capital growth would be.”
• Information supplied by Private Property.
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