One of the great things you can do as an investor is buy a house and then rent it. There is no loss, you have simply come up with an effective way of getting monthly income. If you are beginner then there is need for tips so that you buy right.

Target Your Tenants

Decide whether students, young professionals or families with children are your preferred tenants. This will help you choose where and what to buy.

Ask letting agents for advice, scour local websites for news on companies moving in or expand-ing, and walk the streets to see whether there is already a high supply of properties. If you choose, say, to buy and let a terrace house to students, a new purpose-built block near the university would make it harder to find tenants.

Buy the Right Size Property

The vast majority of tenants want one or two bedrooms only.
Big houses turned into bedsits — known as houses in multiple occupation — look good on paper but are subject to many health and safety rules which can reduce your returns and make management of the property a full-time job.

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There are several other benefits of buying to rent. This is besides income from tenants. The value of your property increases.

Income from Property Value Growth

In addition, since you own the property, you stand to gain from an increase in the property value over time due to changing demands in the area, even if the property doesn’t undergo any changes.

This is obviously going to be a variable thing, as it depends heavily on the area where your rental property stands. In some areas, the value may rise significantly over the course of a few years, while in other areas it may remain flat. Ideally, this value growth holds pace with inflation at a minimum. If you happen to be in an above average area, you might find that you can beat inflation; on the other hand, a really stagnant area may not even keep with inflation.

Sweat Equity

The other factor that you should consider is that your sweat equity is likely to add additional value to the property as you maintain and upgrade it. Doing things like repainting the home, adding new siding, refinishing the inside, doing some basic landscaping to the yard, and so on will add value to the home without significant financial cost.

Not only will this allow you to charge more for rent, it will also increase the value of the property itself should you choose to sell it in the future.


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Buying rental property is not an event but a process and therefore there are steps to follow. This is to ensure that you get the best deal and enjoy being a landlord.

Do Your Homework Before Buying Rental Property

Please – please don’t skip this step. As soon as you’ve made your decision that you want to buy rental property, it can be easy to start shopping for homes and picking out the paint colors. However, your first step begins long before ever stepping foot into a house.

Doing your homework ahead of time means researching:

  • What kind of investment property you want to buy
  • How much you can afford to pay
  • What kind of neighborhood you want to invest in
  • What the average rent is in your area
  • What kind of return on investment you hope to make.

Make a Plan and Develop Criteria

Once you’ve done your initial homework, you can begin making a plan and setting your criteria. I highly recommend you write down your plan and goals, and refer back to them often. If you are looking to buy a single family home for between $150,000 and $200,000 – it’s easy to get distracted by the home with the beautiful garden for $250,000. By stating your plan and your criteria, you can hold yourself accountable to your goals.

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