Here are some top habits adopted by successful buy-to-let investors:
1. Stay current
This is the case with any form of investing. It’s important to stay up-to-date with current events relevant to your industry which means keeping an eye on authoritative economics and news publications such as This is Money and The Financial Times. This is also part of managing macroeconomic risk. Consider setting up a free e-mail account specifically for Google Alerts to make sure you receive up-to-date news on the most important keywords. Scan the headlines weekly.
2. Understand the risks
You’ve probably seen a lot of hype, advertising and “gurus” talking about how it’s easy to make millions in a short amount of time with property. Property investing is accessible, and, yes, it can be very lucrative, but never make any decisions based on hype. Successful investors have an intimate understanding of the risks involved. They analyse these risks in detail and minimise them accordingly. If the rewards match up, they make their move.
3. Consider developing a niche
Whether you decide on a particular sector of the market or a particular type of building, specialising in one area affords you the opportunity to master it in a relatively short amount of time. This means you can be as effective as possible in a given field to maximise your results and avoid the possibility of spreading your attention to thin.
4. Define investment objectives and make a plan
When you’re first starting out in buy-to-let investing, it can seem daunting. In many ways, it’s a big world and there’s a lot to learn. While finding a good investment opportunity is a start, staying on track and achieving acceptable medium and long term goals will only happen if you plan for them. Whether you want to make significant return over a longer period or a quick turnaround for fast profit, defining your objectives and making a plan will keep you on track.
5. Build good karma
It’s not common to hear the word karma thrown around in investment conversations, but it’s considered a top priority by many of the world’s best. The vast majority of successful investors maintain high standards of ethics. Property is a people business and you never know how far someone's reach could extend. Any time you find it tempting to make an easy return, make sure ethics never take a back seat.
6. Consider hiring an accountant
A big part of investing in property means you have to pay taxes. For buy to let properties, you have to pay income tax on your yield and capital gains tax must be paid when you sell the property. Taxes vary from country to country and can be complex, so at least consider hiring an accountant.
7. Build a network
As you develop a successful career in property investing, you’ll meet lots of people. Modern social media such as LinkedIn means it’s never been easier to stay in touch, share ideas and make mutually beneficial arrangements. Always help people out when you can. You never know the kind of trouble you could get help with if you find yourself in a tight spot later.
8. Seek out the experts
Being successful in buy to let investing involves so much experiential learning, so finding a mentor can prove invaluable. Make sure that your sources are as big on the data and as practical as possible, giving the hard facts and solid numbers you’ll need to find success.
9. Learn the calculations
Some people enjoy mathematics; some don't. If you find it tricky, just remember this: those numbers represent your profits... Some calculations such as rental yield and return on investment (ROI) are easy to understand and very useful. Professionals that consistently make a lot of money have an intimate knowledge of these sums. But don't be over ambitious - go for rental yield and remember your costs.
Another option to consider is using a professional letting agent to help manage your property portfolio. At Martin & Co, our aim is to maximise your income, lower your risk and provide you with the time and peace of mind you deserve. With just under 200 offices throughout the country, we have the knowledge and experience to manage your properties. Why not get in contact with your local York or Garforth office to find out more.
Thanks to the author Mark Mackay, Prime Asset Investments.