There is no doubt at all that one of the best and easiest ways of earning a passive income and creating wealth is by means of a property investment in cash positive properties.
Right now is an excellent time to invest in buy to let property. With the recent financial climate there are a good many bargains to be picked up at very good prices. You may think that because the property market is at a very low point at the moment that it is a bad time to buy. Not so. Many banks have more foreclosures on their hands than they care to have, and they are only too happy to get rid of properties.
There are also plenty of property owners who need to sell as soon as they can in order to avoid foreclosure, and you’ll find that now is the time that many successful property investors are taking the time to buy up properties while they are so cheap.
Other sources of cheap property may be found after death or divorce. There are a number of things to keep in mind when purchasing property as an investment.
The first of these is the condition of the property. Many properties on the market may have been neglected by their previous owners and be in need of repair.
This is not necessarily a bad thing as a lower purchase price can be negotiated for a property that is in obvious need of repair. It is you that will have to bear the cost of any repairs, and for this reason you should not consider spending more than 65% of a property’s value when fully renovated.
Before committing yourself and buying any property investments, you should have made up your mind as to how long you intend to keep it.
As far as the value of the property is concerned, then generally speaking the longer you keep it the better, since its value will continue to rise. At the same time the longer that you keep a property the more you will have to pay for maintenance.
The longer you keep a property the more likely you are able to ride out any major fluctuations in the markets, such as we have experienced recently.
When negotiating a price for a property don’t forget that as the purchaser you will be responsible for paying transfer fees to the attorney making the transfer.
Once you have purchased the buy to let property and it is in a rentable state of repair, it can be rented out to tenants. This can be arranged through a local real estate agent if you don’t wish to become involved yourself.