If buying a rental property consider these questions first.

If buying a rental property consider these questions first.

The most important decision is going to be about your character and you as a person. What do you want to achieve out of investing in property and how much risk and hassle do you think you can reasonably handle comfortably? A higher return with the associated risks or a lower one which is more of a passive income, not requiring so much of your time.

Before you start looking, there are three main points to consider:

1. How long do I want to be a landlord? Is it Short or Long Term?
2. Where do I want my portfolio to be located? Locally or a Distance away?
3. Do I have a plan B or exit strategy? What happens if initially things don`t work out? Can you change strategy? Will the property sell easily?

The answers to these fundamental questions will be personal to your plans, but will form the base of you having a solid foundation for moving forward and becoming a professional landlord. In order to get the right balanced advice, you will need to surround yourself by a “power team” which needs to include the minimum of a solicitor, accountant, tax adviser and property adviser.

This team must work holistically together to give you all of the inter-related advice you will need to make correct informed decisions. Taking advice from only one of the suggested team could be dangerous, as it might not take enough account of other factors that need to be considered – this will all be shaped by your plan. What might look good initially could become problematic when reviewed by another professional in the team, as it might not be the correct advice for your current or future circumstances which in turn will affect your property strategy! Only by having a clear understanding of what you want to achieve and taking advice from the whole team, will you be able to have a full comprehension of the options open to you.

Letting a property portfolio can be complex as there are a lot of regulations that need to be understood and followed. It is a lot simpler if as a landlord you know what your objectives are and you are able to buy the right property in the correct location at the right price. Subsequently being able to put the right tenant into a property which is suitable to their long term needs makes managing the rental considerably easier and less stressful!

Next time we will consider what questions you need to ask, to make sure you are buying the right property for your needs and long term strategy. Buying the wrong one will either mean a change of direction to your plans or worse a bad tenancy experience due in part to the wrong tenant in the wrong property. The situation will most likely be made even more uncomfortable due to your worries over being able to cope with this type of rental as it may well be too far outside your comfort zone to be able to deal with as you had envisaged!