Many people, who became disillusioned with the different forms of investments
– private pensions, stocks and shares, savings deposits – turn their attention to property investments. A buy-to-let property can become a real source of income, besides your average retirement incomes. On the other hand, properties’ value significantly increased over the last decades, due to the development and strengthening of the real estate market. Unlike investing in stocks and share, investing into a property is something more tangible: it is a real, changeable, and easy to manage asset, ready to be rented, sold and improved.

This is a very important question, regarding your plans with that estate. If you want to invest less money, you should have in mind a short term ownership. This means you don’t want to spend much on improving the newly bought property. However, small investors opt for long time ownership, which means that you are ready to invest in major maintenance, new appliances, and repair works. You may be able to purchase rehab properties with hard money loans.

Before coming to a decision do some local research. Try to find out from the local newspapers, agencies which types of estates are the easiest to rent out. Buy a map and see the zones which are the most crowded and the most improved by means of communication and transportation. Try to get offers from those city parts which are situated in the neighbourhood of large buildings, intitutions: like hospitals, universities, large corporations, as well as important reference points: metro and railway stations, tram stations, shopping centers, parks, and public sector offices. Estates right in downtown can be very expensive. You can get a property far more cheper if that is from a few corners’ distance from the downtown, however these might not be rented out so fast. Smaller appartments are cheaper to purchase and easier to rent out. If you plan to buy a big house with many bedrooms, consider the crowded areas of the city center, or next to some educational center (college, university) and not the suburbs, since students are more eager to occupy such properties if they stick together in groups of 4-5. Houses with nice gardens in silent suburbs are very difficult to rent out, especially if they are not in a perfect condition.

Most landlord have developed their best methods of finding the best properties. The two most widely used ways are to monitor newspaper advertisements and/or local TV commercials, and to contacts real estate agents. It is also a good point to consider those properties next to your home. This can significantly help regarding the management of the estate, as well as the collecting of rents. Many investors who operate from a longer distance have to let local agents manage the business, thus have to pay them for their services. The most important criterai while choosing the whereabouts of the property are the high rentability and the possibility of capital value growth. Therefore, city centers and locations easily reachable with means of transportation are the most recommended.

If you don’t have cash, the most obvious way to purchase an estate is to apply for mortgages. Most banks as well as building societies are eager to lend the 80% of the total value of a property. However this is calculated by the banks, according to their independently estimated value of the property, which, of course, is always lower than the offered sale price. Your actual income as well as the estimated rental income will also be added to these calcualtions. The less credit debts you have the better your prospects are when it comes about getting a loan. It is also highly recommended to have a considerable amount of cash, put on reserve after buying an estate. From this you can pay for unexpected maintenance, repairs and eventual vacancies. It is also important to have enough saving for yourself, that is for your retirement, and start purchasing a property only after your financial situation is stabilized. Do not expose yourself to the whims of the real estate market, rental income must be only a supplement to your retirement income. Get used to the fact that rents and estate values rise and fall regularly, thus have a primary and steady source of income.

When you decide to jump into the property investment make sure that it is a profitable business for you. That is, shop around for the best offers, and try to get at least ten offers from different agencies or particular sellers, as prices can vary according to the type of the building and the area in which it is situated. Make sure your rental income will be enough to cover all the expenditure related to your property: mortgage, taxes, maintenance costs. You can also get advice from fellow landlords, and there are useful forums on the Internet, from which you can get important tips and tricks on how to manage your investment. Usually, tax deductions are available whenever you have a major repair on the property (fixing the roof, changing a leaking pipe), since these are considered improvements. Before buying the estate, watch out for the latest financial trends: prices and rental demands in a certain area.