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A Guide to Investing in Property

Welcome to Smith & Ken Estate Agents advice guide on how to invest in rental properties to build your property portfolio.

It’s no secret people are becoming frustrated with poor returns in fixed deposits, as well as the hazardous risks in investing in stocks, commodities and pensions. The great thing about property is that what goes down in value also goes back up at some point. This provides more peace of mind than receiving a letter from your local stockbroker or financial advisor saying ‘sorry better luck next time.

Please take a look at our overview below on how you can become a property investor in rental properties. We also have some other property investments in the sub menu to the right of this page if you prefer to invest in off plan property or development opportunities.

Rental Property Investment Strategy

Find Property

The first stage in building your property portfolio is finding the property that offers the best net rental yield. Notice we used the word ‘net’, because whilst you may find some properties with higher ‘gross’ yields it’s important you double check the community or services charges for those properties as it’s the responsibility of the property owner to pay them which will invariably reduce the net amount payable to you.

A lot of seasoned property investors tend to purchase studios, 1 bedroom or 2 bedroom apartments or condos because they are more than likely to find a Tenant sooner for smaller properties than the larger estates. The logic behind this is simple; there are more people in this world with a dollar than there are people with five million dollars.

A good suggestion is to target highly populated areas that are in close proximity to business hubs as it will be straight forward in finding a Tenant that doesn’t want to commute far to work. Another popular choice for Landlords is cities whereby there are universities due to the high demand from students for accommodation.

Why invest in buy to let property?

Property investors purchase buy to lets because they provide both capital appreciation and rental yields. It’s not rare for a property investor to sometimes rely only on capital appreciation and accept little or no monthly yield. This is because the strategy behind investing in buy to let property is to allow your investment to increase in value, and then once it has, to release equity out of the property by re-mortgaging. With that additional equity, it is used as the down payment in purchasing another buy to let property using a buy to let mortgage!

Sound simple doesn’t it? With the advice and guidance of Smith & Ken it is however as you may have noticed already, the key component in establishing and developing a rental portfolio is using finance. It’s important you get money to work for you rather than work for your money. Check out the next stage in developing your portfolio by clicking on ‘Arrange Finances’ above!

Please click here to search all our tenanted properties available for sale. We’ve even indicated the expected rental yield next to each property.

Arrange Finance

Now that you’ve discovered that finance is the key component in developing a rental property portfolio, it’s important that you speak to Smith & Ken Home Loans in establishing the best buy to let mortgage.

It’s worth noting mortgage lenders typically look at the investment potential of the property rather than your salary or income.

How much deposit will I need?

In order to obtain a buy to let mortgage you will need to pay a down payment. Typically the down payment is usually higher than that of a first time buyer or moving home mortgage. It is likely the down payment will be from anywhere from 10% to 25%.

How much rent should I charge?

It’s very important your monthly rental income exceeds your monthly mortgage payments by a certain percentage because when a mortgage lender evaluates your case they will look at the investment potential of the property. In some cases, they look for a monthly rental income to be 130% of your monthly mortgage payment.

Use our minimum monthly calculator to work out how much rent you should charge!
How much rent should I charge
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DISCLAIMER: Please note this is not a quotation, the figures are subject to your credit status, earnings, and a valuation of the property you’re purchasing.

Buy to let calculator

Pop some numbers into our buy to let calculator and calculate how much you can borrow based on rental income!

Calculate how much you can borrow based on rental income
00,000

DISCLAIMER: Please note this is not a quotation, the figures are subject to your credit status, earnings, and a valuation of the property you’re purchasing.

If you’re ready to discuss your mortgage options, please click here to select the country in which you want to buy a rental property in and contact our Customer Care Helpdesk in that country. Alternatively fill out the form and we’ll call you straight back!

Alternatively fill out the form and we’ll call you straight back!

Your Details

Once you’ve found your buy to let property and purchased it via your buy to let mortgage it’s important you now find a Tenant to pay the monthly mortgage amount! Please click on the 'Find Tenant' option above!

Great, you’ve purchased your buy to let property with your buy to let mortgage, now you need to find a Tenant to reside in your property and pay the monthly mortgage payment!

A lot of property investors prefer to purchase rental properties whereby the property already has a Tenant, as they’re able to work out their finances straight away without having the risk of worrying about finding a Tenant. However, if you do need to find a Tenant not to worry, Smith & Ken has 1,000’s of Tenant’s register every single month.

This is due to our relationship with a lot of Corporate Entities; whether they’re multi-national companies or small to medium sized enterprises we provide homes for their employees every single week.

We’re also open 7 days a week from 8 am to 8 pm and also encourage our Agents to conduct viewings in both the evenings and weekends; purely and simply to accommodate for the demands of Tenants.

Our on-line Tenant Portal for managed properties is a real magnet with Corporates and their employees. When they rent a managed property they’re able to see all the properties registered under their name and within those properties they’re able to see a copy of the tenancy contract, a copy of the utility connection certificates, see the moving in inspection report, view the status of any maintenance case raised as well as the damage inspection report, and are able to send messages to the property manager. In addition they can use our iPhone FIXIT© App that allows the Tenant to take a photo of the damage and send it to our maintenance team with a click of a button.

If you haven't noticed yet, the Corporate Tenant that you desire prefer to live in managed properties. Having your rental portfolio managed is crucial if you wish to develop your portfolio unless you have 96 hours to waste per property per year?

Have a read of Manage Property option above to find out more about property management and why it’s essential to you as a Landlord.

List your property for rent with Smith & Ken by completing the form below and we’ll call you straight back!

For more information, please complete the form below

Manage Property

Having your property managed is the key to achieving peace of mind when building your rental property portfolio. Only you know how much time you can spare to deal with your Tenant’s telephone calls and handling the resulting work.

Smith & Ken’s Property Management service is like no other. It is designed to give you peace of mind and relieves you of the commitment of being a full time Landlord, hence why Smith & Ken manages over 1,500 properties on behalf of Landlords in both Dubai and Los Angeles.

Our industry revolutionary service provides you with an unbelievably wow experience with the ability to manage your property on-line via our Landlord Portal in My Smith & Ken. You’re able to view your Tenant’s passport copy, the Tenancy Contract, the Utility Connection Certificates, and the Moving In Report. You can also do all your banking on-line and download your current statement of account so you can submit to your accountant. Even better than that you can view any maintenance cases raised by the Tenant and the subsequent damage inspection report, quote, invoice and work assurance report!

Hence why no matter where you are, 24 hours of the day, 7 days a week, 52 weeks a year you can view your managed property’s status at any time you want!

For more information about our property management please click here.

Now that you understand the importance of property management and the huge benefits behind it, let’s move on to the next stage in developing your rental portfolio – Value Property.

List your property for lease with Smith & Ken by completing the form below and we’ll call you straight back!

Value Property

So you’ve found your buy to let property, secured your buy to let mortgage, got yourself a corporate Tenant and the property is successfully being managed by Smith & Ken. A year or so has passed, and your property’s value has increased.

As explained in stage one, the strategy behind investing in buy to let property is to allow your investment to increase in value, and then once it has, to release equity out of the property by re-mortgaging. With that additional equity, it is used as the down payment in purchasing another buy to let property using a buy to let mortgage!

What’s the next move I make?

You need to get your property valued to see if the property has increased in value since it purchased. If you’re looking for a rough estimate enter the area your property is located below

How much is your property worth?
How much rental income is my property entitled to?

If you’re looking for an exact valuation, please contact your local Smith & Ken office or complete the form below and we’ll call you straight back.

When an Agent evaluates the value of your property, what they tend to do is visit your property to conduct what is known as a valuation or market appraisal. During this visit, the Agent will take a look at your property to review the external finish, the internal finish, the number of bedrooms, the total living space, the bathrooms, the fixtures and fittings, the storage space, the view etc. Other external factors that determine the value of your property are its location, its accessibility, its nearby infrastructure (transportation links), and its local amenities and facilities. An Agent will also provide you with 3 comparable similar properties that recently sold so you’re able to see the prices of properties that sold because any mortgage lender that re-finances your property will also look at the same.

Once you’ve valued your property and you can see there is additional value in which you can release equity the next stage is in applying to a mortgage lender in releasing the equity from your property so you can buy another buy to let property.

Let’s move onto our Grow Your Portfolio section above so you can find out more about releasing that equity and what to do with it.

Grow Portfolio

Once you’ve discovered how much equity you can release, the next step is to speak to a mortgage advisor at Smith & Ken Home Loans to determine the best buy to let mortgage for you.

Crunch some numbers on our Equity release calculator to work out what equity you maybe able to release.

Equity Release Calculator

DISCLAIMER: Please note this is not a quotation, the figures are subject to your credit status, earnings, and a valuation of the property you’re purchasing.

If you’d like to find out more information about releasing equity from your property, please contact your local Smith & Ken Home Loans office and its mortgage brokers will be able to advise you in greater detail on the best equity release products for you.

What do I invest in next?

Think ‘If something works why change it?’ as mentioned earlier in the ‘Find Property’ section, a lot of seasoned property investors tend to purchase studios, 1 bedroom or 2 bedroom apartments or condos because they are more than likely to find a Tenant sooner for smaller properties than the larger estates. To get to this stage you’ve already found a property that has enabled you to get here so quite simply, look to buy another property similar to that (stick to what you know).

Growing a rental property portfolio can be a slow process with long-term results. Speak to one of our Agents who will be able to advise you on achieving those results.

Please click here to search all our tenanted properties available for sale. We’ve even indicated the expected rental yield next to each property.

If you’d like one of our Agents to call you back please complete this form!

Search for a Property