Owning a house in the UK continues on an upward trend. However, even if 65.6 per cent of people in the country owned their homes in 2018, the rate stays the lowest among the European countries. On the other hand, some people see owning a house as a way to do business, hence the buy-to-let model. But some landlords tend to make mistakes in implementing a buy-to-lend practice, and here are some of them.
1. Spending Too Much For Small ROI
If you want to buy a property as part of your investment portfolio, you will have to spend time on it. However, if you buy a house to finance your business and believe in low ROI, it might not be a good deal for you. You will have to spend money on repairs, maintenance, and operational expenses, and you will not be able to recoup the money in the short and long run.
2. Forgetting to ‘Futureproof’
Landlords should consider looking into the future when purchasing a property, which means that they should look into scenarios that might happen in the next 10 to 15 years. For example, they should look into the zoning laws and decide if they want to change the property and the business practice.
Even if buying to let is a good strategy, you might neglect that the population of a country is growing exponentially. If the demand for housing is growing, the property price will go up. If your investment is small, you will find it difficult to resell it.
3. Not Buying a Property for Gains
No matter what people say, buying a property is a good investment, and it should be the best option for people who want to start investing. However, you will not be making any ROI if you buy a property to earn money but spend most of your time and money on repairs, maintenance, and other related costs.
Some investors buy a property to make a profit out of it. However, other investors take this as an opportunity to buy a property as their primary residence, hoping to sell it for a good profit. The former has the chance to make a reasonable ROI, but the latter does not. If you aspire to buy a property just to resell it, you should ensure that you consider the property’s resale value.
4. Not Understanding a Landlord’s Role
A landlord should provide a good experience for his tenants. They should ensure that the house is good and give the intended service. Real estate is a good investment. However, some people want to buy a property and rent it out, not for the excellent ROI. These people do not take the landlord role seriously.
However, if landlords do not treat the property like their own, they might lose out on money. Moreover, it is not only about spending money for repairs, maintenance, and improvements, but it is about ensuring that the tenants are happy. If you do not take care of the property like your own, you might have a bad tenant who will not pay the rent, resulting in a financial loss.
Conclusion
Buying a property can be a good idea to earn you some money. However, there are many things that you should keep in mind. Before purchasing a property, you should ensure that your chosen model will produce the most ROI and negligible costs.
A Move Brokers allows first-time homebuyers to apply for a mortgage with the help of experienced brokers in Chester. Our goal is to provide an equal chance for everyone to live in a house they prefer by offering a free initial consultation on which programs suit them best. Contact us today and get the best mortgage advice in Chester.
”This article is for information only and should not be seen as advice or a recommendation to act. As a mortgage is secured against your home or property, it may be repossessed if you do not keep up the mortgage repayments.”