Property not only provides a roof over your head, but it can also be an investment asset too. Used as a means to park money, to accrue capital appreciation or to receive a monthly rental yield, and sometimes all three.
Buy-to-let investments are popular as property is a fairly liquid asset. At a time when banks are offering low interest rates on savings, buy-to-let investments are a good alternative but the numbers need to stack up.
Like any investment it pays to do your homework. Consider these six ways to achieve the best possible yield and to make sure your asset works hard for you.
1. Research different lettings strategies.
Calculate the rent that could be achieved for both short and long term agreements, but remember short term lets warrant a higher rent due to the additional running costs between tenancies such as cleaning, in addition to factoring in void periods between tenants. Properties also should be fully equipped down to bedding, teaspoons and towels for shorter terms but are not necessary for longer tenancies. Or consider combining the two, renting your property in peak seasons for short terms, and in low season for a longer term if the property is situated in a place influenced by tourism seasonality.
2. Check the competition.
Speak with local agents to find out the type of property that is in demand, rents quickly, and what the most desired location is. A good agent will be able to advise you of current market conditions to help you secure a property that will let quickly to immediately start generating an income.
3. Be prepared.
Ensure the property is looking presentable and photographs well for marketing purposes to attract people to view. The more people that view the quicker the property will rent but it only takes one person to walk through the door to want to secure it. First impressions are important, and properties that are in good condition tend to appeal to good quality tenants who look after the property during their term.
4. Choose a mortgage product (if any) suited to your situation.
Fixed rates mortgages are preferred for some buy-to-let landlords and they know exactly how much their monthly outgoings are. They can therefore plan accordingly and calculate what offer they can accept on the property.
5. Consider your market.
If you are aiming for professional tenants in Bangkok, vicinity to the mass transit system tends to be on top of their wish list, but if you are hoping to attract holiday makers for short term lets, think about distance to attractions and amenities.
6. Look beyond the unit.
Carefully select the building ensuring that it is well maintained and communal facilities are in good condition. This will help to attract tenants, but retain existing tenants too. Also smaller buildings mean less properties, which creates less competition if there are a few buy-to-let investment properties in the building.