A Beginner's Guide into Serviced Accommodation

Are you considering stepping into the world of property investment? Or perhaps you’re looking for a way to maximise returns on your property? If so, then serviced accommodation might just be the venture you’ve been searching for. In this beginner’s guide, we’ll explore what serviced accommodation is, why it’s gaining popularity, and how you can get started in this exciting industry.

What is Serviced Accommodation?

Serviced accommodation, also known as short-term rentals or vacation rentals, refers to fully furnished properties available for short-term stays. Unlike traditional hotels, these accommodations offer the comforts of home, including amenities such as kitchens, living areas, and sometimes even additional services like housekeeping.

Why Choose Serviced Accommodation?

There are several reasons why serviced accommodation has become increasingly popular among travellers and property investors alike:

  • Higher Returns Serviced accommodation can often generate higher rental income compared to long-term rentals, especially in prime locations or during peak seasons.
  • Flexibility As an investor, you have the flexibility to use the property for personal stays or rent it out on a short-term basis to maximise income.
  • Market Demand With the rise of platforms like Airbnb and Booking.com, there’s a growing demand for unique and personalised accommodations, making serviced apartments an attractive option for travellers.
  • Diversification Investing in serviced accommodation allows for diversification within your property portfolio, reducing risks associated with market fluctuations.

Getting Started in Serviced Accommodation

If you’re ready to dip your toes into the world of serviced accommodation, here are some steps to help you get started:

  • Research  Begin by researching the local market to identify areas with high demand for short-term rentals. Look for factors such as tourist attractions, business hubs, and event venues that can drive occupancy.
  • Property Selection Choose a property that meets the needs of your target market. Consider factors such as location, size, amenities, and potential for renovations or upgrades.
  • Legalities and Regulations Familiarise yourself with local regulations and zoning laws governing short-term rentals in your area. Ensure compliance with tax requirements, licensing, and safety standards.
  • Furnishing and Design Invest in quality furnishings and decor to create a comfortable and inviting space for guests. Pay attention to details that can enhance the guest experience, such as high-speed internet, smart home features, and thoughtful amenities.
  • Marketing and Management Utilise online platforms and marketing strategies to promote your property and attract guests. Consider partnering with property management companies or using automation tools to streamline operations and guest communications.

Serviced accommodation presents an exciting opportunity for investors to capitalise on the growing demand for short-term rentals while offering travelers a unique and personalised lodging experience. By understanding the fundamentals of this industry and following the steps outlined in this guide, beginners can embark on their journey into the world of serviced accommodation with confidence. Whether you’re looking to generate passive income, diversify your investment portfolio, or simply embark on a new entrepreneurial venture, serviced accommodation may be the key to unlocking your property success.

Building Wealth Brick by Brick: A Comprehensive Guide to Rental Property Investment

Rental property investment has long been considered a robust strategy for building wealth. This comprehensive guide is your roadmap to navigating the intricacies of the real estate market, offering insights and strategies to help you make informed decisions on your journey to financial prosperity.

Understanding the Basics of Rental Property Investment

Defining Investment Goals

Clarify your investment goals, whether it’s generating passive income, building equity, or achieving long-term capital growth. Understanding your objectives will guide your investment strategy.

Financial Readiness

Assess your financial readiness for property investment. Evaluate your credit score, savings, and debt-to-income ratio to determine your borrowing capacity and eligibility for financing.

Choosing the Right Rental Property

Location Considerations

Select properties in high-demand locations with amenities and infrastructure that attract tenants. Proximity to public transport, schools, and employment centres enhances the property’s appeal.

Property Types

Consider the type of property that aligns with your investment goals—options include residential homes, apartments, or commercial properties. Each type comes with its own set of advantages and considerations.

Financing Your Investment

Mortgage Options

Explore mortgage options to finance your investment. Compare interest rates, loan terms, and repayment options to find a mortgage that suits your financial situation and investment strategy.

Down Payment Strategies

Develop strategies for saving for a down payment. Explore options such as government assistance programs, savings plans, or partnerships to secure the necessary funds.

Property Management Best Practices

Tenant Screening

Implement thorough tenant screening processes to select reliable and responsible tenants. Background checks, rental history verification, and income assessments contribute to successful tenant selection.

Effective Communication

Establish clear lines of communication with tenants. Promptly address concerns, provide timely maintenance, and ensure a positive landlord-tenant relationship to enhance property management.

Maximising Returns and Long-Term Strategies

Rental Rate Optimization

Regularly review and adjust rental rates based on market trends and property improvements. Optimising rental rates contributes to maximising returns on your investment.

Portfolio Diversification

Consider diversifying your property portfolio over time. Owning properties in different locations or investing in different property types can mitigate risks and enhance long-term returns.

Frequently Asked Questions

How Can I Assess a Property’s Potential for Appreciation?

Assess a property’s potential for appreciation by researching historical price trends in the area, evaluating planned infrastructure developments, and considering the overall economic growth of the region.

Is Commercial Property Investment Suitable for Beginners?

While commercial property investment can offer high returns, it may be more complex and risky for beginners. Residential properties are often considered a more straightforward starting point for novice investors.

What Are the Tax Implications of Rental Property Investment?

Tax implications vary, but common considerations include rental income taxation, capital gains tax upon property sale, and potential tax deductions for property-related expenses. Consult with a tax professional for personalised advice.

Building wealth through rental property investment is a journey that requires careful planning, research, and ongoing management. This comprehensive guide serves as your companion, providing valuable insights to help you navigate the challenges and achieve success in the dynamic world of real estate investment.

Best Ways to Invest £30k in Property Using Serviced Accommodation

Investing in serviced accommodation can be a smart way to make your £30k go further. However, it’s important to approach this with careful planning and strategy. Here are some key steps to consider when investing this amount in the serviced accommodation sector.

Understand Your Investment Goals

Before you start, clarify your investment goals. Are you seeking long-term capital growth, short-term rental yields, or a balance of both? Your goals will shape your strategy and guide your decision-making process.

Market Research

Thorough market research is key. Analyse different locations to find areas with high demand for short-term rentals, favourable property prices, and solid tourism or business traveller potential.

Property Selection

£30k can serve as a substantial deposit on a property in many regions. Look for properties that would be attractive to short-term renters, considering factors like proximity to popular attractions, transport links, and local amenities.

Rent-to-Rent Strategy

Alternatively, consider a rent-to-rent strategy. This involves renting a property from a landlord and then subletting it as serviced accommodation. This can be a more accessible option if buying a property outright is beyond your budget.

Property Improvement

Use part of your budget to make the property more appealing to short-term tenants. This might include modernising the décor, upgrading facilities, or investing in high-quality furniture.

Professional Advice

Consider seeking advice from property investment specialists, financial advisors, and legal professionals. They can provide valuable insights and help you avoid potential pitfalls.

Effective Marketing

Once your serviced accommodation is ready, invest in effective marketing. High-quality photos, detailed descriptions, and strategic pricing can help attract guests and secure bookings.

Consider a Management Company

If you’d prefer not to manage the property day-to-day, consider hiring a management company that specialises in serviced accommodation. They can handle bookings, cleaning, and maintenance, allowing you to enjoy the benefits without the time commitment.

Investing £30k in serviced accommodation can provide a substantial return if approached strategically. By understanding your goals, doing thorough research, selecting the right property, and investing in effective marketing and management, you can maximise your return on this investment.

Winter doesn’t have to mean downtime for your business. Join our next webinar this coming 25th of October at 5PM and transform your off-season into a thriving ON season.

Don’t let this valuable opportunity slip away! Space is limited, and seats are filling up fast. Secure your spot now by clicking this link; bit.ly/MakeYourOFFSeasonYourONSeason Let’s make this winter your most profitable season yet!

Airbnb Hosting and Serviced Accommodation Investment in the United Kingdom: Is It Worth It?

The UK’s hospitality industry has undergone a significant transformation, with platforms like Airbnb and the serviced accommodation sector leading the way. But is investing in these ventures worth it? Let’s delve into the details.

Airbnb Hosting in the United Kingdom: A Profitable Venture?

Airbnb allows you to turn your property or spare room into a money-making asset. The platform’s popularity among travelers seeking unique, homely accommodation provides a steady stream of potential guests.

Pros of Airbnb Hosting:

High earning potential: Particularly in tourist hotspots and during peak seasons, you can command competitive prices for your listing.

Flexibility: Airbnb allows you to control your availability. You can block off dates when you need the space, ensuring that the hosting gig fits around your life.

Support protection: a secure payment system, and a review process to help ensure smooth transactions with guests.

Cons of Airbnb Hosting:

Time and effort: From managing listings to coordinating check-ins and maintaining cleanliness, hosting can be time-consuming.

Regulatory considerations: Some cities in the UK have imposed regulations on short-term rentals, which hosts must comply with to avoid fines.

Despite the cons, Airbnb hosting can still be a lucrative venture if managed efficiently, or with the assistance of a property management service.

Investing in Serviced Accommodation in the UK: A Worthwhile Investment?

Serviced accommodation typically includes furnished apartments available for short-term or long-term stays, providing hotel-like amenities such as housekeeping services.

Pros of Investing in Serviced Accommodation:

High Revenue Potential: Serviced accommodation can generate a higher return on investment (ROI) compared to traditional long-term rentals due to higher nightly rates.

Growing Demand: There’s a rising trend for serviced accommodation, thanks to the demand from corporate travelers and families who prefer home-like comforts during their stay.

Tax Benefits: Serviced accommodation is classified as a furnished holiday let (FHL) in the UK, which can offer certain tax advantages.

Cons of Investing in Serviced Accommodation:

Higher Operational Costs: With higher cleaning and maintenance needs and the provision of amenities, serviced accommodation can be more expensive to run.

Market Fluctuations: Your occupancy rates and income can fluctuate with the seasons, the economy, and other factors beyond your control.

While there are challenges in investing in serviced accommodation, careful market research, strategic location selection, and professional management can help increase your chances of success.

Is It Worth It?

The potential for generating a significant income is definitely present in both Airbnb hosting and serviced accommodation investment in the UK. However, success in either venture depends on various factors, including property location, the quality of service provided, market demand, and the host or investor’s ability to adapt to changing market conditions.

Both options require an initial investment of time, effort, and potentially money (in property upgrades or hiring a management service), but with a well-executed plan, both can be profitable ventures in the UK’s burgeoning short-term rental market.

Thus, whether Airbnb hosting or investing in serviced accommodation is ‘worth it’ depends on your personal circumstances, your available resources, and your commitment to making your venture a success.

Winter doesn’t have to mean downtime for your business. Join our next webinar this coming 25th of October at 5PM and transform your off-season into a thriving ON season.

Don’t let this valuable opportunity slip away! Space is limited, and seats are filling up fast. Secure your spot now by clicking this link; bit.ly/MakeYourOFFSeasonYourONSeason Let’s make this winter your most profitable season yet!

A Guide to Choosing the Right Location to Begin Your Serviced Accommodation Journey

For property investors and aspiring serviced accommodation hosts, finding the ideal location to start your serviced accommodation venture is crucial. In this blog post, we will provide you with a comprehensive guide on how to discover the perfect area for your serviced accommodation business. Whether you’re new to the industry or looking to expand your portfolio, understanding the key factors involved in selecting the right location is essential.

Let’s dive in and explore everything you need to know about finding the ideal place to launch your serviced accommodation business.

Researching Potential Areas

When searching for the ideal serviced accommodation area, conducting thorough research is vital. Here are some essential steps to help you in your search:

Analyse Local Demand
Examine the local market to determine the demand for short-term rentals. Look for areas with high tourist activity, business conferences, universities, or other events that attract visitors seeking temporary accommodation. Additionally, consider the presence of corporate offices or major employers that frequently bring in business travellers.

Assess Competition
Evaluate the competition in the area you’re considering. Research existing serviced accommodation, hotels, and other short-term rental properties to understand their offerings, occupancy rates, and pricing. Identifying gaps or underserved niches can help you carve out a unique position in the market.

Understand Local Regulations
Familiarise yourself with local regulations specific to short-term rentals. Some areas may have restrictions on operating serviced accommodation or require specific permits or licenses. Ensure compliance with all legal requirements before finalizing your decision.

Factors to Consider

Several factors play a significant role in determining the suitability of an area for your serviced accommodation business. Keep the following aspects in mind during your search:

Several factors play a significant role in determining the suitability of an area for your serviced accommodation business. Keep the following aspects in mind during your search:

Location Convenience
Consider proximity to transportation hubs, attractions, amenities, and popular tourist destinations. A central location with easy access to public transportation can greatly enhance the appeal of your property.

Target Market
Identify your target market and choose an area that caters to their specific needs. For example, if you’re targeting business travellers, select an area close to commercial districts or conference centres. If your focus is on vacationers, opt for areas with tourist attractions or beautiful landscapes.

Rental Yield
Evaluate the potential rental yield in the area. Look at rental rates for similar properties and analyse the average occupancy rates throughout the year. A location with consistent demand and attractive rental income can significantly contribute to your profitability.

FAQs - Frequently Asked Questions

Are certain cities or regions in the UK more suitable for serviced accommodation?

Different cities and regions offer varying opportunities for serviced accommodation. It’s essential to conduct thorough research specific to the area you’re interested in and consider factors such as tourism, business activities, and local regulations.

Should I focus on popular tourist destinations or explore emerging areas?

Both popular tourist destinations and emerging areas have their advantages. Popular tourist destinations offer a steady stream of demand, while emerging areas may provide growth potential and potentially lower competition. Consider your goals and risk appetite when making this decision.

How can I stand out from the competition in my chosen area?

Differentiate your serviced accommodation by offering unique amenities, exceptional guest experiences, and personalized services. Understanding your target market and fulfilling their specific needs and preferences will help you establish a competitive edge.

Finding the right area to start your serviced accommodation business in the United Kingdom is a crucial step towards success. Thoroughly research potential areas, analyse demand and competition, and ensure compliance with local regulations. Consider location convenience, target market preferences, and rental yield to make an informed decision. 

By following these guidelines, you’ll be well-equipped to find the perfect serviced accommodation area and embark on a profitable journey in the thriving world of short-term rentals.

Looking to delve into the world of Airbnb hosting or serviced accommodation but unsure where to start? We have just the right opportunity for you. Learn from experts, gain insights into the industry, and start your journey in the world of Airbnb hosting with confidence by joining our Free Airbnb Simplified Webinar.

Serviced Accommodation 101: What is Serviced Accommodation?

What is Serviced Accommodation? 

It is one of the most popular property strategies everyone’s talking about nowadays. But what exactly is it and how does it work? Simply put, serviced accommodation is a property that offers hotel-like facilities on a short-term basis. You also probably heard it as short-term rental, holiday lets, and commonly advertised on Airbnb, Booking.com, VRBO and Coolstays. 

In line with the services and amenities are fully equipped homes from your kitchen, living spaces, bedrooms, and dining and some have outdoor space. Guests are also expecting bathroom essentials just like a hotel with fresh towels, complimentary shampoo, soap, body wash and conditioner. To create the overall ‘home away from home experience.

Investors typically let serviced accommodation to tourists or working professionals looking for short stays on a night-by-night basis. Since it’s ideal for those who are planning a temporary stay in an area, or those who want to move around but still have the option to stay at their own place some could be contractors who work away Monday-Friday and need somewhere to stay during this period.  

And now, as the two years of the pandemic activity moves further behind us, the lasting impact and the changes in habits, routines and travel are now becoming more clear. Now is the right time to get started. If you’re new to Air BnB or the world of Serviced accommodation this Market Review Webinar is the best place to learn how accurate data have driven, the modern hospitality business navigates the changing landscape and seasons in the UK.

Types of Serviced Accommodation SA can range from studio apartments to luxurious penthouse suites or even houses. They’re typically classified into:

  • Serviced Apartments: These are apartment units with separate bedrooms, a living area, and a fully equipped kitchen.
  • Aparthotels: A blend of an apartment and a hotel, they provide hotel-like services in an apartment-style accommodation.
  • Holiday Homes: These are standalone properties like cottages or villas, suitable for families or larger groups.

The Appeal of Serviced Accommodation Serviced Accommodation offers more space, privacy, and flexibility than traditional hotels. Guests have the freedom to cook, entertain guests, or work comfortably. They’re also usually more cost-effective for longer stays.

The Role of Serviced Accommodation in the Hospitality Industry Serviced Accommodation or Airbnb Business plays a vital role in the hospitality industry, catering to a wide array of guests, from business travellers on extended trips to families on vacation. It offers a more personalised and homely alternative to standard hotel rooms.

Serviced accommodation offers a lucrative opportunity for property owners and a comfortable alternative for travellers. Its rise in popularity demonstrates the growing demand for flexible and homely travel accommodation. 

Join us this  8th of August, Webinar starts at 7 PM

Looking to delve into the world of Airbnb hosting or serviced accommodation but unsure where to start? We have just the right opportunity for you. Learn from experts, gain insights into the industry, and start your journey in the world of Airbnb hosting with confidence by joining our Free Airbnb Simplified Webinar.

Our Airbnb Simplified Webinar covers the A-Z of Airbnb hosting, from setting up your listing to creating a seamless guest experience.


Tips to Avoid Pitfalls in Owning and Investing in a Serviced Accommodation Property

Owning and operating investment Serviced Accommodation property can provide several important advantages. There are potential disadvantages to owning Serviced Accommodation property; however, you can help to minimize possible pitfalls by following certain guidelines to protect your investment.

First, always make sure that your expectations regarding investing in SA property are reasonable and realistic. You should always approach the investment of Serviced Accommodation property to achieve a positive cash flow; however, do not expect that you will be able to buy a new vacation home within a year.

In addition, it is important to make sure that you take the time to do your research and ensure that you understand the rules and regulations regarding the ownership and operation of Serviced Accommodation properties. As the owner of an SA property, you must abide by certain laws which provide specific information regarding your liabilities and responsibilities.

Along those same lines, it is important to be certain that any terms and conditions agreements you handle are legal. If you handle a lease or rental agreement which is not legal, you may experience several problems if a guest happens to violate your terms and conditions. To be safe, it is best to have an attorney draft your terms and conditions.

Before purchasing any property, be sure to have the property inspected or else you may discover you are facing a set of expenses you did not anticipate. Having the property inspected by a professional before you sign on the dotted line will involve an expense; however, compared to the expenses you could face by purchasing a property without an inspection, it is certainly well worth it.

When you begin the process of renting out your property, take the time to verify your guest identity and make sure to have a damage deposit in place. These are both steps that many novice operators often overlook in their rush to fill their properties and begin turning a profit; however, it can be detrimental. Remember that having an empty unit is always better than rushing and having an irresponsible guest who may destroy your property.

Joining the Serviced Accommodation Groups in your local area can also prove to be helpful by putting you in connection with experienced investors and operators. You can also gain access to reliable contractors, inspectors and other professionals who can make the process of operating SA property much easier.

It is also imperative that you make sure you have adequate property insurance as well as liability insurance. Property insurance will help to protect your investment while liability insurance will protect you in the event anything should happen to someone while on your property.

Finally, make sure you take the time to establish an emergency fund to cover expenses that may crop up unexpectedly. Remember that you are operating a business and as such you must be prepared for those times when expenses arise. The exact amount that you wish to contribute to your emergency fund is ultimately up to you; however, it should be sufficient to cover typical expenses that may arise. The general rule of thumb is to put aside 20% of the value of your property. To make the process of establishing an emergency fund easier, consider setting aside a certain amount of your profit each month into a special account is recommended.

How To Prepare Your Vacation Rental For The Low Season

The low season is an opportunity to breathe after a busy few months and work on improving your offering. Also, now is the time to guarantee your home is ready for the colder months coming up. That being said, We are sharing a few tips on how to prepare your vacation rental for the low season.

1. Do a deep clean.
Usually, during the Summer months, there isn’t much time between bookings to schedule a deep cleaning so this is a great time to do it. So, pay attention to details that are often overlooked or that intensify during the Winter:

  • Wash all blankets and cushion covers
  • Wash window treatments
  • Flip the mattresses
  • Clean all kitchen appliances, as well as drawers and cabinets
  • Check and Clean light fixtures
  • Clean every nook and cranny
  • Clean the vents or if you have a fireplace
  • Bleed your radiator
  • Change smoke detector, TV Remote, Door Lock Batteries
  • Make sure the walls are clean and not mouldy

2. Do routine maintenance work.
This might also be the time to do any maintenance or renovation work your vacation rental needs. Also, it’s the perfect opportunity to check if doors, windows and roof tiles are letting water in.

3. Consider having a portable heater on hand.
Is your home warm and cosy enough to keep your guests happy during the colder months? If not, you might want to consider investing in portable heating equipment. It’s an investment at first but, in the long run, it will make your vacation rental feel more inviting and prevent complaints and late-night calls because of the freezing temperature in the property. Also, make sure to leave some instructions on how to use it for your guests.

4. Equip your rental with essential amenities for the Wintertime.
Make sure your vacation rental is equipped with the essential amenities that your guests might need for a comfortable and cosy stay throughout the Winter.

  • Provide warm bedding and extra blankets for the bedroom and for the living room
  • Providing books and board games for rainy days at home, Netflix and other subscriptions is a plus.
  • Extra light bulbs and batteries
    Provide wood if your property has a fireplace.
  • Check Kitchen Items and Linen Inventory.
  • Bonus point: provide tea, coffee or ingredients for hot chocolate

5. Update your vacation rental listing and decor.
Another bonus point is to update your vacation rental decor for the season. Don’t worry, this doesn’t mean to completely change your decor. Small details can make a big difference, especially during the holiday season. You can add some twinkle lights, a small Christmas tree or just a few decorations here and there. It will certainly make your guest’s stay more special and enjoyable.

Other than that, you can decorate your property for the Winter by changing up the accent pillows and adding a throw to the sofa, and also by adding a few spice-scented candles around the house.

6. Promote Christmas and New Year
Although your Christmas and New Year dates are likely to book up, there are still lots of people looking to get away both before and after Christmas. Your rental rates in November, December and early January are probably a fraction of the cost compared to the festive holidays, but guests can still experience the festive activities.

Finally, don’t fret about the low season
Holiday Rentals are competitive and you need to stand out amongst the competition, even more so when targeting low-season travellers. Hopefully, these tips will help. Join our free webinar and we’ll guide you through our tried and tested strategies that allowed us to achieve 75-85% occupancy through the winter months, without compromising heavily on nightly rates! http://tiny.cc/IkonicWinterWebinar

Use this seasonality efficiently to undertake essential maintenance, create next year’s marketing strategy and enjoy the holiday with your family.

Security Deposit Matters

As a serviced accommodation property investor. You will also need to collect a security deposit. A security deposit is used as a type of security to ensure that the property will be maintained well during the time of the guest’s occupancy. In the case that either of the above circumstances should occur, you will have the security deposit to serve as compensation for any damages.

The exact amount of the security deposit which you collect will vary depending on circumstances. Some states have regulations regarding the amount of money that can be collected for a security deposit. Ideally, it is best to collect the largest deposit allowed to ensure that you do not run into any problems later on. Where allowed by law, many landlords or serviced accommodation operators find it beneficial to collect a security deposit that is 50% or equal to their booking value.

For example, if the guest has a pet, you may decide to collect a larger security deposit. The same would be true for other circumstances such as if the guest will be having a celebration in your property, or will come in a large group, etc. In these cases, you may decide that it is a good idea to collect a larger security deposit than you would normally collect to cover the risk you are taking on; provided, of course, that you are allowed to collect a larger security deposit under local law.

Security deposits should always be paid in full before the time the guest arrives. Keys should never be issued until a security deposit has been received in full; otherwise you will find that the purpose of the deposit has been defeated. It is simply not a good idea to allow guests to pay a security deposit in the form of several payments.

Remember that it is always important to check with and follow your terms and conditions and company protocol regarding what you must do with the security deposit after you have received it. Generally, it is better if you do not complicate matters by labeling the different parts of a security deposit. In the past many operators charged a variety of different deposits including a key deposit, cleaning deposit, etc. This can become quite confusing very quickly. These types of guests tended to leave the property in terrible conditions and necessary repairs that the deposit did not cover. You may even wish to state in your terms and conditions all the additional charges if there are damages or loss in the property upon check-out.

Learn more on how we minimise anti-social behaviour or guests abusing their properties by contacting us at Ikonic Training Academy.

Investing in Rental Properties

There are many ways in which a person can make a living when it comes to property investing; some carry more risks than others. Those that carry the greatest risks are often the property investment methods with the highest potential profit but slow and steady, in many cases, wins the race. Flipping houses is in the news a lot because so many fortunes have been made doing this-more that a few have been lost in this venture as well but those don’t make the news nearly as often.

Working with rental properties isn’t nearly as glamorous and doesn’t provide the almost instant profits that flipping houses might but it is also a great and very valid method of property investing that will build a steady profit over time if you plan properly. Rental properties are in demand now more than ever with so many people going into foreclosure and losing the homes they’ve worked hard to build for their families. For this reason, rental properties are a good thing to own at the moment, especially those that are family homes.

There are many reasons that people rent and while there are some risks involved when renting properties, the risks are much lower than the risks involved in flipping or pre-construction investment endeavours. There are a few things you should consider when purchasing a property for the sake of renting however to make a wise and long-lasting decision for your property investment.

First, only invest in rental properties in areas that people want to live in. It may be true that you can buy property cheap in a few very run-down sections of town but it is doubtful that you will turn those properties into profitable rental units. It is best to pay a little more for a more attractive address for renters. You will find that your properties are inhabited more often, which will make you more money in the long run.

Second, pay attention to the types of people in the area and buy rentals accordingly. It is quite possible to turn large homes into multiple smaller apartment units (according to local zoning laws) that are ideal for college students. You do not want to do this however in an area that is geared towards family homes and won’t be friendly or tolerant of college students. Design the rentals according to the market you are attempting to attract.

Third, don’t be greedy. The goal of owning rental properties is, of course, to make money. At the same time if you’re price of your properties are too high you will find that they sit empty more often than not. Every month that your property is empty is a month that you aren’t making money on that property at best and a month that you are losing money at worst.

Fourth, know the market. Study the local market for buying property and renting property. This will help with many things, not the least of which is determining whether or not any given property will make an attractive rental unit. Another thing it will help you determine is how much rent the units you are considering can bring in month after month.

Finally, when renting properties you need to keep your eye on the long-term goals rather than short sighted goals. Property rental is a marathon rather than a sprint with the greatest profits coming at the end. You will want to pay as little interest on the property as possible and pay the property off as quickly as possible to realize the maximum profit potential and acquire new properties. The real money when renting properties as a property investment isn’t in renting out one or two units but twenty or thirty. The more rental properties you own the more money you stand to make from owning them.

Seek professional help that can give you a better understanding of your property potential or learn and plan the best strategy in finding your first property investment. Contact our property experts today to give you a better understanding!