Property Investing - Your First Rental Property

While it's sad to read of the countless families suffering due to the recession losing their homes, and businesses downsizing, an opportunity is being created for those people who are able to grab it. All these families, and downsizing businesses still need somewhere to live and operate from. The rental market is growing and growing.

So how do you work out the best properties to invest in to meet this growing need? An easy way is to simply track the properties that are coming up for sale. That will give you a good indication of what properties are needed. Think about it. A five person family leaves their home, but still needs the size of property to live in. A business downsizes, but still needs a similar size of property but cheaper.

Is there a good or bad area? The best area to buy property in is the one you know. You know your neighbourhood and surrounding area. What you have to do is think in terms of someone renting, perhaps without their own transport. Put that hat on as you search for properties. Good public transport, local shops, parks etc etc. Think in terms of what the ideal tenant wants. Also, buying local means that you can keep an eye of your properties. You are more likely to get better tenants when they know you can pop in at any time.

One thing to be aware of is local knowledge biting you back. If people get to know that you are in the market for good rental properties, they may expect a better deal as they know you, and you might feel obliged not to try to haggle down the price. Remember, this is your business. If they want to sell, you have the price that you are prepared to pay and that's it. Once you get to a certain level, you may want to consider working through an agent if you want to buy a property from someone you know, for the sake of good neighbourly relations!

Different kinds of property to think about.

Are you great at DIY? Like to get your hands dirty? Well property that needs a certain amount of refurbishment might be the one for you. If DIY is most definitely not your thing, property that can be rented out straightaway would seem a good fit. Think about who is currently occupying the property and who you intend to rent to as you search. Property occupied by students which you plan to rent out to people higher up the food chain would need quite a bit spending on it. Property occupied by owners are often the best bet. They most likely have looked after their home.

Terrace or detached? For maintenance, terraced is best - you only have two outside walls! Think about the maintenance that will be needed on the property you are planning to buy. Of course, the better the property, the more you can charge, but at the end of the day you want hassle free.

The internal finish is important to consider. Laminate or wooden floors are low maintenance for living rooms, but carpets are cheaper to replace and clean for bedrooms and hallways. Remember to balance practicality, price and maintenance.

It doesn't have to be perfect! Remember that you won't be living there. Yes, your rental properties should be clean, practical and smart. But think back to what you are doing - renting property to make a profit - don't blow your money on top of the range items because you like them. Get good quality items, yes, because they will last longer and cost you less in he long term. But remember, it's a business, not an exercise in style.

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