Investing in rental properties is a technique used by a large number of people who want to expand their property. The reason is that real estate is a safe investment against inflation and crises.
Discover our 4 tips for buying a new rental property.
Do some serious market research
Before starting the process of buying a rental property, it is recommended that you do a study of the market you are about to enter. The first point to consider in this study is the demand for housing in relation to the available supply. For example, to evaluate rental offers for a apartment for rent Tubize, in Belgium you have to browse real estate platforms like Rentola. This search engine collects all rental offers published by owners throughout Belgium. This facilitator allows owners to make their properties available to thousands of candidates while allowing them to easily get in touch for more information.
This means that if you want to get into renting properties in Tubiza, a platform like Rentola not only gives you the pulse of the rental market, but is also a place where you can post your offers to have a better chance of getting tenants. This assessment also makes it possible to determine the prices charged in the rental housing market in this region. The aim of this assessment is not to rent a property type with equivalent area and services for more than the prices in the same area.
A market study of real estate for rent should also focus on the location of the property being purchased. Based on this information, the valuation of the rental property and its ability to easily make its purchase profitable will be determined. It is advisable to buy a new property in a dynamic area, a popular location that is accessible by public transport. This type of area is a safe bet that is unlikely to have a shortage of tenants.
To ensure the profitability of this investment and to find a property at a reasonable price, it is not recommended to buy in large cities. On the contrary, prefer the surrounding cities or medium-sized cities where the infrastructure is developing, as well as the demand for rentals.
Create profiles of prospective tenants
Buying real estate must take into account the type of accommodation offer. We have to ask ourselves what profile of tenant the accommodation will be offered to. For example, families with children are not looking for the same type of accommodation as students or vacationers. It is the desired profile that will lead to the purchase of a property.
Families generally need houses with large rooms and a garden or terrace. They stay quite a long time and the price of accommodation is quite high.
Students are looking for cheap rental accommodation that has limited space. There is strong rental demand at this level, because there are very many students compared to the available offer. In addition, they move regularly as part of their studies.
Furthermore, renting accommodation for vacationers is another option that requires a lot of patience. Demand for temporary rentals is low in this area and tenants do not stay long.
Choose a newly built property that you like
When choosing a buy-to-let property, you must always put yourself in the shoes of the person looking to rent. If this property makes you want to settle down and make it your main residence, you should buy it. This inquiry takes into account all aspects, especially the decoration of the property, the practicality of the surroundings and the attractiveness of the environment. If the property appeals to you, there is a good chance it will appeal to future tenants. We must not forget that the goal of every investment is to be profitable. Therefore, you should be assured that your choice includes all the arguments that will attract tenants, such as nearby green areas, balconies, shared areas, social rooms, etc.
Calculate your borrowing capacity
When implementing the investment, it will be necessary to pay the price of the building. Except for the rare few who can pay with money from your savings accounts, you will have to go through a bank loan. The bank provides loans based on your borrowing capacity, which is the maximum amount the bank is able to provide to finance a rental investment project.
Borrowing capacity is determined after an assessment, on the basis of which the bank decides whether to grant the loan or not. During this assessment the bank will look at your debt ratio which must not exceed 35%.
Ultimately, the purchase of a building is for the purpose of renting a good investment that must be well prepared. The only way to make this investment pay off is to choose a property that will be a pleasant place to live for those who will live there.
Source: batirama.com