With interest rates at 40-year lows and stock markets so volatile, it’s difficult at the moment for individual investors to achieve a return on their money that’s even equal to inflation – which is probably the main reason why the interest in buy-to-let property investments has been increasing again over the past year.
So says Berry Everitt, MD of the Chas Everitt International property group, who notes that there are other good reasons for investors to choose bricks and mortar just now.
"Low interest rates of course make it easier afford a second property - and more likely that the rent will pretty much cover any bond repayments, especially if you can buy with a sizeable deposit."
"Meanwhile, the difficulty that many households are having in obtaining a home loan - because their credit records are impaired or their debt is too high – means that rental demand is high. And the slow rate of delivery of new housing developments, especially in the affordable range, suggests that rentals will hold up well for the next few years."
However, he says, if you’re keen to buy an investment property, you must remember to apply the same "rules" about location, condition and security as when buying a home for yourself.
Writing in the Property Signposts newsletter, he observes: "Price is important, of course, but cheap is very seldom best."
"And finding the right property - and reliable, creditworthy tenants – should never be left to luck. Buy-to-let investors should seek out an experienced, reputable estate agent to help them evaluate the soundness of any proposed property investment, and to help qualify prospective tenants."
Then once there are tenants in residence, Everitt says, you need to be certain that the property is well cared-for and maintained and that the rent is paid on time. This is where appointing a specialist to manage the investment makes good sense.
"Few investors are prepared or able to be full-time landlords and this responsibility is best delegated to an experienced, well-briefed estate agent based in the vicinity of the property. Such an agent will be able to deal objectively with tenants who don’t pay or who damage the property – and should also have an established network of competent contractors to carry out necessary maintenance and repairs.
"In addition, an agent who specialises in managing rental properties will also ensure that the investor receives professional advice on the host of laws and regulations that govern landlord-tenant relationships, and on the demands of local government regulations."
Article By: www.chaseveritt.co.za
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