Buy-to-let guide: Where to start?

Buy-to-let guide: Where to start?

Private Property South Africa
Private Property Reporter

When deciding on whether to invest in a property, these are the 2 first important points to consider:
1. Know your target market; and
2. Select your investment property carefully.


ALWAYS CHOOSE QUALITY OVER QUANTITY

The number of properties you own does not matter, apart from what it does for spreading your risk. Buying quality investments, that provide reliable and consistently increasing cash-flow year-on-year, is where the money is, when buying-to-let. Below are the 2 first important points to consider:

01. Know your target market

Knowledge, experience and success goes hand in hand. The better you focus, the more professional and specialised you will become.

The more properties in a specific area you have seen and evaluated, the easier it becomes to spot an attractive opportunity the moment you come across it.

Put yourself in the shoes of your target tenant. Who are they and what do they need? If they are students, their digs need to be easy to clean and comfortable with hard-wearing no-frills appliances and don’t forget the wi-fi. Young professionals on the other hand demand privacy and a modern sense of style without being overbearing. For families, the requirement would be to have plenty of space for their belongings.

02 Select your investment property carefully

Hunting for your investment

We all know the old saying… “Location, Location, Location”.
It still remains the most important factor when buying property. When you are buying for investment purposes, you have to look out for areas that have high rental demands.

Location, however, is not nearly as important in buy-to-let property, as some agents would want you to believe. Find the location that makes you the most cash flow instead.

If the numbers work well, and the demand for rental housing exists in the area, then the location becomes almost inconsequential.

It is much easier to keep an eye on your tenants if you live nearby and if they (and your investment properties) are geographically grouped together.

It also generally translates in discounted fees from your professional team such as letting agents due to volume discounts.

!! TIP : You can find great buy-to-let opportunities on www.privateproperty.co.za or download our app and have them sent straight to your phone. Call us on 087 35 111 66 for any inquiries.

Zoning, restrictions and permissions on the property

Check that the property is truly suitable. Ensure that zoning and permissions of the property suits your anticipated strategy with it. Also check the body corporate or estate rules before investing, as regulations and restrictions in those may limit what you are able to do internally or externally, to increase the appeal for potential tenants.


NEVER BUY EMOTIONALLY

Choosing a property for investment is very different to choosing one to live in. Do not buy a property just because you have fallen in love with it. Make sure that what you are buying is going to generate the expected return on your investment. Emotion is POISON for any investment, including your property portfolio.


Now that you know where to start...

The next step in your Buy-to-Let Investor Guide is "The financial aspects of investing in property":

  1. Where to start?
  2. The financial aspects of investing in property
  3. The metrics used for evaluating property investments
  4. Costs to take into account when running the numbers
  5. Managing tenant relationships professionally
  6. Education, team and exit strategy


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