Tips for buy to let investment
Rise and fall of property prices is well known. Investors get profits when property prices rise and sustain losses when property prices fall. But even when property prices fall, buy to let market is strong and gives constant returns. But before investing in buy to let market, one should know about the rental market. Here are the few tips for buy to let investment.
Select an area which is famous among renters
Location does matter for buy to let investment. Property situated on prime location has always more demand and high rental yield. Property located in lower middle class areas yields less rents and same is the case with high end properties as rents are very high and chances of finding suitable tenants is equally difficult. Therefore it’s better to select area which is famous for renters.
Buy property near to central business districts and bus stations
Most people prefer to rent houses which are near to work. People also think about nearby transportation facilities before renting a home. Houses that are located near to central business districts and bus stations have high occupancy rate. Therefore it is better to buy house near to central business districts and bus stations for buy to let investment.
Size of property
Size of property is also very important for buy to rent market. One should know that renters always look for small houses or 2-3 bedroom apartments to rent. It’s hard to find tenant for large size houses. But houses up to 5-7 Marla have good demand and higher occupancy. Therefore size of property should also be considered as tips for buy to let investment.
In Pakistan disputes between tenant and land lord is everyday talk. To avoid the disputes, it’s very important to select a tenant who is responsible and pays the rent on time. Students do pay regularly but their stay is normally short. But on the other hand people with no proper jobs have always difficulties to pay on time. Pensioners and government servants always pay on time.
Know your duties
As a landlord you have many duties. Firstly you have to register the rent agreement with nearby police station. Secondly you have to make sure that property is properly maintained before occupancy by tenant. Thirdly you have to pay the tenant for any repair they do on your behalf. Fourthly you have to give at least 1 months’ notice to the tenant before eviction.