First thing first, real estate is a high growth asset, which will give the major uplift to any investment portfolio. It is imperative to invest in real estate to give overall investment portfolio a major push.
Always Buy Distress
Let’s assume you have been meaning to buy a luxury car for a very long time but it is simply out of your budget and comes the sale and the car of your dreams is at a 50% discount. Don’t think twice and grab it. The same rule applies in real estate industry. It is cyclical industry that sees its highs and lows. As soon as the low tide arrives buy your favourite asset at a discount. Your rental yield is based on the price you bought the asset at. Always lock it at a great price to maintain higher rental yield.
Invest in Refurbishment
The amount saved from purchase should be invested in refurbishment of your property as that investment will serve you for a long time. Every property needs uplift, better finishing changes the face of the asset completely. Wood varnish, neat grouting, proper sanitary fittings do wonders to appreciate the overall value of the asset.
Choose furnishing Wisely
Just like refurbishment, well-planned furnishing goes a long way. Keep things simple and minimalistic which work for all kinds of tenants. The saying “Less is More” in this scenario goes a long way. Invest in basics and timeless pieces, which will be relevant for a long time to come. If the foundation work is sound the asset will fall in place perfectly. Also property owners worry about upfront furnishing cost but what needs to be kept in mind is that this cost of furnishing is amortized over more than five years and net cost effect of furnishing with higher rental income is close to negligible. In order to extract the best potential from the asset, investing in furnishing in critical for the success of overall performance of the asset.
Leasing the Asset as Holiday Home:
Last but not the least, after taking care of all prerequisites mentioned above; the real juicy part comes when such ready to move in homes make better money marketed as holiday homes.
With advent of shared economy models like airbnb, holiday home industry is becoming more stable and mature.
Rental yield with short-term guests is as much as 40% more as compared to annual rental.
There is great flexibility for property owners wishing to manage their homes as vacation rentals. The unit can be in your personal use for as long as you want and when it is not, then it can be marketed as a vacation rental property which will make you more money with guests visiting your city calling your house their vacation rental pad.