Investing in property is one of the smartest ways to build up a passive income and improve your own financial stability. Be a great landlord and you’ll always have tenants, which means you not only receive a small income, but every year you make more simply because you’ll have made off more and more of your mortgage.
Start early enough, and you can have fully paid off properties bringing in a very healthy, passive rental income. You can use that to easily retire in utter comfort – all you need is to set aside a portion of the rent to pay a management company, and then you’re a free bird. Your hard work will have paid off.
On top of it all, you’ll also have properties you own that you can then sell if you ever need to.
As with all things real estate, of course, being able to buy low makes a huge difference. That’s why you need to get your foot in the door in up-and-coming areas, and know how to save even further with a few key tips and tricks:
1. Pay Attention to Redevelopment Plans
Cities like Manchester have expanded massively in the last decade or two, with a fully revitalized city centres and a booming market to boot. If you already owned a property before those redevelopments happened you will have seen a massive increase in the value of your property. In 2000, for example, the average property price was just under £50,000. Today it’s well over £200,000.
The same story plays out every time there’s a successful redevelopment plan. That’s why you need to pay attention to new developments. In Manchester’s Salford, for example, the new £1 billion Peel Waters project is set to completely change the face of Salford and even Manchester as we know it.
2. Buy Before Launch
Another tip to help you invest in property in Manchester is to buy early to get a discount. You can get the Tranquillity Manchester development for less than market value, for example, simply by buying a unit before they’re completed. Once completed, they can then be sold for market value if needs be, or you can use that increase to renegotiate your mortgage.
3. Stick to Low-Maintenance Properties
If you are just starting out as a potential landlord, or want to pivot into real estate, then choose low-maintenance properties first. These properties are either often new builds, recent builds, or an older home that’s been completely renovated.
4. Bring Forward a Large Deposit
BTL mortgages often require a 25% to 40% as deposit. You will also be expected to choose a property where you can reasonably expect 125% of your mortgage cost back in rent. This means you should have a 25% revenue stream to help cover maintenance and repair costs, and also give you some money to pocket.
5. Put Together a Business Plan
The easiest way to secure a BTL mortgage, then, is to bring a business plan with you. This way, you can show the average rent in the area for similar properties upfront, allowing them to look at how profitable your plan is, and approve it based on your strategy, and also the size of your deposit.
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