PROPERTY NEWS - According to Rawson Property Group MD Tony Clarke, it's a myth that you need to be rich and have a mountain of cash in hand before you can become a buy-to-let property investor.
He notes that while the banks may require up to 40% of the purchase price as a deposit when you purchase a buy-to-let property, you can reduce the amount of cash you need to get started by buying a smaller, less expensive unit.
“If you’re already a homeowner, you could also consider using some of the equity in your property to help you buy a small rental unit. Or you could pool resources with friends or family members – as long as you have a proper legal agreement in place that details your contributions, how the property will be run and how any profits are to be divided.
“And, with rental demand set to rise substantially in the coming months due to the declining economic situation, we believe that now is a very good time for anyone who can afford to invest in buy-to-let property to do so without delay.”
Investing in smaller properties
What is more, he notes, the latest FNB Property Barometer statistics indicate that you stand to make a much better capital return if you invest in smaller properties, because the average price of such homes is currently rising at a rate of around 12,5% a year, while that of medium size properties is only growing by around 6,6% a year and that of large properties by around 4,5% a year.
“If you’re already a homeowner, you could also consider using some of the equity in your property to help you buy a small rental unit. Or you could pool resources with friends or family members – as long as you have a proper legal agreement in place that details your contributions, how the property will be run and how any profits are to be divided.
“And, with rental demand set to rise substantially in the coming months due to the declining economic situation, we believe that now is a very good time for anyone who can afford to invest in buy-to-let property to do so without delay.”
Investing in smaller properties
What is more, he notes, the latest FNB Property Barometer statistics indicate that you stand to make a much better capital return if you invest in smaller properties, because the average price of such homes is currently rising at a rate of around 12,5% a year, while that of medium size properties is only growing by around 6,6% a year and that of large properties by around 4,5% a year.
