Tarporley, United Kingdom, September 27, 2012 --(PR.com
)-- For investors who have already taken the step into property investment and want to expand their property portfolio into two or perhaps more investment properties, then there are steps you need take and factors to consider to ensure that your investment strategy is successful.
If you have found that for your initial investment property your rental income has been steady and covers your costs, then it may be the right time to consider expanding your property portfolio.
The first thing you need to do is to think about the long-term commitment and financial implications. It's important not to overstretch yourself.
The advantage of investing in a second or third property is that you are aware of the pitfalls and should have reliable tried and tested contacts such as solicitors, builders, estate agents and so on. You will also be aware of the process of renting out your property and will have a template tenancy agreement and process in place.
However, it's important that you review your mortgage options as things can change month to month when it comes to lending and the criteria required. The type of mortgage you choose may also be different. It's also essential that you are aware of void rental periods and that you account for a fall in the market.
Susan Alexander is a property mentor, she specialises in buy to let advice and helping property investors build a successful property portfolio. She says:
"If you have already started investing in property and want to take your portfolio further, there are definitely some factors you should consider before buying. Some questions you might want to ask yourself. What is the purpose of my investment? Is it for immediate cash flow? Is it for future equity growth? Is it my future pension? Whatever you are investing for here are some important factors to bear in mind when searching for your next investment. Consider the following:
1. You need to purchase your property at the right price, ideally below the current market value.
2. Do you understand how much your potential purchase will rent out for? Speak to some local letting agents to gain an understanding of this in the area you are considering your next purchase in.
3. Will the rental income will be sufficient on a monthly basis to cover costs and not just the mortgage repayment? For example you should account for buildings insurance, letting agent fees, and consider an amount you could set aside each month to cover general maintenance.
4. Do you have provision to cover any initial or future void periods when the property may not be tenanted?
5. Are going to manage the property yourself or through a letting agent? Obtain some basic knowledge on your responsibilities as a landlord."
Notes to Editors
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