THE first few months of the year always brings a wave of investors to the market many of which have decided to invest for the very first time.
From an agent's perspective, meeting with these new clients can be exciting as they are always keen to explore the 'rental world' and are ready to soak up the information thrown at them.
First time investors are eager to learn, eager to listen and eager to purchase. While the initial stages of becoming a landlord are undoubtedly exciting, Rachael Ioannou from Eastside Property Centre, shares her key points that every new investor needs to consider before buying:
1. Find a real estate agent. If you choose to work with a real estate agent in your search for rental property, choose one that has a good reputation in the community.
You do not want to get involved with a real estate agent that does not have your best interest in mind.
Choose a real estate agent that you are comfortable talking to, not one that intimidates you.
Tell your real estate agent exactly what you are looking for in purchasing rental property and your spending budget.
If you can work with an agent that is also involved in the rental department, even better these agents will be able to give you great insight into the rental market and give you up to date rental appraisals for the properties you are inspecting.
2. Find a money source. Depending on the individual bank's policies, some banks will not loan money to you for purchasing rental property.
The reason? Because you may not be guaranteed a tenant each month.
If you cannot get a loan from a bank, ask a trusted friend or relative who might be interested in partnering with you in this new business venture.
3. Search until you find. Just because you find a house for a great price, it may not be the best deal.
Hire a professional building and pest inspector to check the property from top to bottom, inside and out.
If it is built on a firm foundation, you have yourself a possible deal, but if the foundation is not sturdy, do not even bother with it.
For your first rental purchase, avoid buying a house in need of a major renovation.
4. Prepare for repairs. In the world of rental properties, repairs are a major part of the game.
Before moving in your first tenants, repair and replace anything that needs a major overhaul, such as flooring or appliances.
5. Be smart. If you are smart, you will select an experience local real estate agent to list and manage the property on your behalf.
The first quarter of the year is also the busiest time for leasing, which means that landlord's benefit from being able to secure quality tenants at higher than average rates.
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