10 Smart Way Young Adults Can Invest In Property. When someone thinks of property investment, we associate them with billions. The reality of the matter though is that you can still make it as a property mogul who started from little. The following tips will help you how to.
1. Get Your Finances In Order
Make sure that your personal finances are in order, because putting money aside is an important element in preparing to buy a home. Look at your personal spending to know if you are ready to handle the costs. Most potential buyers are reliant on financial institutions for finance, which means their home buying capability is subject to bond approval.
2. Rent To Own or Lease With An Option To Buy
This option is especially great when considering how to buy first rental property. If you have a lease-option for 5 years, at the end of that time, you will need to purchase the house and can get a bank loan then. Meanwhile, you can use the time to fix your credit and/or save for a down payment.
3. Rent Backrooms In Your Home
If you own your own home, you can raise money by renting out backrooms. If you’re willing to put in more work, you’ll get higher returns by renting your rooms through a short-term lettings agency. The profits can be very high if you live in an area with decent tourist, student or business demand.
4. Choose Flats Over Houses
Smaller properties, like flats, generate a better return than houses. If your budget can stretch that far, go for a 2 bedroom, 2 bathroom flat. The greater flexibility will make the property attractive to a wider range of tenants so it’s less likely to lie empty.
5. Invest In A Familiar Area
It is not always a great idea to invest in a property hundreds of kilometres away. You’re not an expert on the area and are not likely to be able to judge whether the location, price etc. are good or not. A bargain will be much easier to spot in your own backyard. It will also be much easier to keep an eye on your tenants if you live nearby.
6. Add Value To Your Property
One of the best ways to make money out of a property is to add value to it. Renovating bathrooms and kitchens, for instance, will ensure you get a better return when renting the property out and make you more money when you’re ready to sell.
7. Borrow Against Your Own Home
Some people in this situation choose to extend their mortgage to release the cash to invest elsewhere. Some financial institutions will be happy for you to borrow more against your house in order to invest in property. Once you are able to buy an investment property, you can refinance it in one year
8. Have an Investment Partner
If your friends or business partners are also have a passion for property, you could always invest together. If you do decide to invest with someone you know, make sure you’re 100% aligned, discuss what you want to do, and all those scenarios that could go wrong.
9. Be Tax Efficient
You will never become a property millionaire if you pay the taxman more than you absolutely have to. Speak to a tax advisor on the best entities for buying a property and how you can save tax on your rental income.
10. Be Patient
Make sure that you weigh up the pros and cons of an investment before you commit. Always remember that property is a long term investment. If you want to make money from it, you need to be prepared to be in it for the long haul. Don’t put yourself in a position where you’re forced to sell quickly because you over extended yourself financially.