Buying an Investment Property – Things you Need to Consider
I have been thinking about buying an investment property.
This year I hit the big 5-0 and it is a milestone.
It is a time re-evaluate a lot of things in life everything from finances to relationships to health.
I have not been too savvy over the years.
A lot of my life has been reacting to the instability around me from loss to divorce to health I haven’t always been very settled. Pensions and financial security have often take an a back seat and not had the full attention from me that they required.
It is definitely time now for that to change.
I have been thinking about buying an investment property in lieu of a pension to ensure a regular income in my old age.
None too savvy with the property market this is something I am going to have to really look into before I make any big decisions.
Why property investment?
I love houses, designing them, decorating them, planning the garden, everything to do with property and I think I would have a lot of fun with a property investment project.
I also think property is a pretty substantial thing to invest in. I would see it as a secure investment – I like tangible things far more than things I cannot see or touch. They feel solid and sure to
I would employ a property management company to manage my investment property for me so I would not have to deal with collecting rentals, advertising or the like. I would like a hand in setting it up to be just right in the first place but I do know my limits!
How to work out the finances
Budgeting would be critical to the success of this project.
I would need to work out my potential mortgage repayments and how much I could expect to get in terms of rent to make sure the two balance out. I would need money spare for contingencies and for me to live off.
This is crucial because the whole point of an investment is a return! I would definitely get a property accountant to help me with the finances.
Firstly though I would work out what my mortgage would be using this handy mortgage affordability calculator and then I would check out repayment terms and compare them to expected rental and property management costs to see if my plans were at all feasible.
It may be that I consider re-mortgaging my current property in order to free up a deposit for an investment house – this sounds complex but actually this remortgaging calculator makes doing the sums easy and speedy.
It is important before I go any further down the road to ensure financially I can afford to do this.
Buy to let or property development when buying an Investment Property?
If I ensured the finances worked out correctly I could make a tidy profit from an investment home. I think I would definitely be thinking buy to let (I like the idea of a steady income) rather than developing my property and sell. But actually property development is a potential option too and one that might engage my creative side more.
The regular income would be nice!
The importance of a good contacts list when Buying an Investment Property
A great team of builders, plumbers, electricians and handy people would be vital. Though ideally I would buy something that needed very little structural work the importance of reliable and quality tradespeople cannot be overestimated.
Buying an Investment Property is going to take some work!
A mortgage calculator, a look at right move and some reading up about property are my starting points. It’s time to get serious about my financial future.