The Ultimate Guide To Building A Rental Portfolio
All it takes is one gray hair to help you confront your own aging. As we grow older, we become more aware of our need to prepare for retirement, and while most of us put it off for as long as possible, there will come a time when you need to top up your nest egg. If you have savings in the bank, there are more aggressive avenues down which to guide your money rather than the minimal interest that it is accruing with your bank. By looking to real estate, you can begin to create a small rental portfolio. By purchasing two or three properties that you lease out, the rental yield could give you enough money to cover mortgage repayments, a small amount to put into savings and all the while the property can be increasing in value. Take a look to see how you can be successful in using real estate to finance your twilight years.
You will need to consider the sorts of individuals that you will target with your property. Realty firms like William Pitt have plenty of condos and apartments on their books in decent locations that will appeal to the young professional crowd. These individuals haven’t yet accrued enough money to purchase their own pad and want to rent to give them more freedom in their living arrangements. They may not have settled in a location yet and may be looking for experiential living rather than putting down roots. This demographic tends to have no children but plenty of money meaning that their priority tends to be in the quality of the property in which they live. Target this market, and you could see a lucrative return on your investment.
It’s vital that you set a budget and stick to it. While it may sound relatively simple not to overstretch yourself on a purchase price, you also need to consider your renovation costings, marketing materials and lawyers fees. Every part of the financial puzzle needs to add up to be sure that you don’t lose out. Renovating can be fun, but you also need to see it as a business proposition. While you may adore that avocado green bathroom suite, the chances are that your potential renters will not. Keep things bland, plain and simple, to appeal to the widest market.
Unlike flipping a property, building a rental portfolio is a long term investment. You should be looking to keep your property for at least a decade. Only then will the dwellings have increased significantly in value, and you will have accrued enough money from your yield each month to top up your savings or reinvest in other markets. A property portfolio can have a wider role to play within your other short, medium and long term investments. Don’t feel like you have to be pigeonholed in any way. Having your finger in many money pies is often the safest way to invest your hard earned cash.
The property market, while more volatile now than in years gone by, is still a safe bet for a long term investment. Follow this guide to build your rental portfolio and enjoy lucrative returns on your investment.