At some point in our lives, especially when we have accumulated some form of wealth over time, either through work or special methods, we might want to get better use of that money instead of just letting it sink into our bank accounts, or going to waste by spending it in a bad investment.
Some people might believe that saving that money for special occasions might be the right move, and although saving might be safer than investing, sometimes money just devalues over time, which is the reason some people invest their money into jewelry and precious stones, like gold and silver.
Although that is a very reasonable way to save money and avoid having it devalued, it won’t increase your profit over time, and that’s what investing is all about: to make more money than you initially invested. And it is well known, all around the world, how the real state can be one of the best forms of investment there are.
One form of real-estate investment, though, is known as buy to let. It is a British phrase that refers to the purchase of a property for the simple sake of renting it for a long-term profit. Here’s more information about the specific meaning of the phrase in case you are interested: https://en.wikipedia.org/wiki/Buy_to_let.
Overall, it might sound like a great idea, but let’s showcase some of the benefits and disadvantages of renting.
The Benefits of Renting
Renting is all about the long-term profit of owning a property. In some cases, depending on the type of property you are renting, you might be able to live off that property and cover your daily expenses thanks to the monthly payments you’ll receive, but on most occasions, just one property might now be enough. Still, it also depends on your very own circumstances.
A good example is how some places charge $500 for rent, and for someone who’s living on their own, on an owned house, that might be more than enough. But, if the owner of the property is paying rent as well, of course, it’s another story.
Normally, a single person might spend around $2,600 per year to cover their dietary expenses, and adding some other services require such as internet, electricity, water, gas, this rises up a little, although it depends entirely on the person.
For a $500 monthly income obtained from your property, you’ll end up with $6,000 per year. You are left with around $4,400 to spend on other stuff. A single person might be able to live from it, reducing the expenses of bills and services, but a regular household will surely require more money than that.
How Locations Matter
Still, it depends entirely on the place the property is located. Location is a very important part of owning property because it is one of the factors determining its value on the market. The more concurred or visited the location is, or the more connected it is to places, the better, thus, the more expensive it is to rent and buy
Prestos is a good example of a great place for investment, and you can get further Preston advice if you are interested. Some good examples of expensive cities are Oxford, Chelmsford, Brighton, and Truro.
Besides location, the size of the property, how many rooms and bathrooms it has, the quality of the materials used for building as well as its design and aesthetics, are other things that can decide the price for the purchase or rent.
Risks for Renting.
With that said, renting properties also has its downsides. A renter might encounter many problems over the years when it comes to renting a property, and most of them are related to the way tenants deal with it.
Landlords and renters tend to have a contract for the occasions, just to make sure they are legally protected again tenants in case they mistreat the property they are in. That way, they will receive compensation for the damages.
Sadly, that is not always the case, and some people dislike the idea of having a contract when renting a place. It all depends on the approach the renter decides to go for, but on most occasions, they end up suffering from losses overtime. Of course, these losses are often much smaller than the amount of profit they earn from renting.
In case you decide to invest your money in properties for rent, you should absolutely read this guide over here to get to know about what things you should avoid and how to deal with them.