Property price swings can have a major impact on your business, as they do on the economy, but can also help create a strong and healthy rental market. A good example of how property prices and rental prices are related is as follows: if you were to rent a flat for a month and it was only 30% above your initial offer, would you consider it a bargain? Most would think so, if this was an instance that was unusual, or you had a good relationship with the landlord.
It may be that the tenant will leave you for another landlord if your rent increases, especially if the property is located in an area that is either very expensive to live in, or in a property with no adequate supply. When a landlord increases their rent, it will have a positive effect on the property.
There are other factors that may affect how much you will make from a property that has been rented out before. This will depend on the property and the building and the age of the flat. If the flat has been paid off and the tenant can’t afford to move, this could reduce the amount you make.
How to turn a profit
The level of rent that you are able to pay will also have an effect on the amount of excess capital expenditure that you can make. Most property landlords will agree that they are earning a profit, but you still need to remember that you will be paying out more than you receive in rent.
Renting rental properties also provides you with some advantages. Firstly, you will be able to see what types of properties you like. You may be able to offer different apartments and houses to different tenants.
Once you have looked at a particular property, you will then be able to assess its suitability to you. If you have an eye for detail and are familiar with the location, you can assess it before you accept it as being the best fit for you.
If you’re renting from a property manager you will be able to use his experience and knowledge to your advantage. He may have specialised in a certain type of property and be able to advise you on the layout, maintenance and preparation for winter.
Overseas market comparison
The UK’s market is now becoming saturated with property, meaning that there is more competition for tenants. As a result of this, you may want to put your house on the market earlier, to attract a better range of tenants.
If you are the landlord of a new property, you should consider offering tenants a lease option to help them find out whether they would like to occupy it. They will probably have no previous experience of property ownership, so having this option will be very useful.
It is also a good idea to take some photographs of the property before you enter into any agreements. They may prove useful when they decide to move out, or when they decide to renew their lease.
You should also make sure that you get a copy of the tenancy agreement drawn up between you and the tenant before you sign it. This will give you the chance to make amendments if necessary.
If you are in the real estate business, you will want to know about renting properties. Although it may not seem important, but a good property can make all the difference to your business, and the profits that you earn.