Turning My First Home Into An Investment Property
The pandemic has changed so much in our lives including purchasing properties. It’s definitely a seller’s market at the moment but that doesn’t mean buyers can’t benefit either.
I’ve previously shared tips on the blog about how I became a homeowner at 24 (read here) and although all of that advice still stands, I thought it would be good to share some tips on buying a home as an investment since I’m now lucky enough to be surrounded by lovely clients in property development like the owner of Dublin Based Arkcon Properties (read here) who owns quite the portfolio. The tips I will give aren’t a blueprint and therefore you should always be cautious but they’re the tips I’m following myself as I look to venture out into the property game.
1. Your first home isn’t your forever home so experiment and keep up with maintenance
For most people, their first home isn’t their forever home so it’s a good time to experiment and learn. It’s easy to add value to some properties. Sometimes it just takes some redecorating and you’re set and other times it takes a little more work. I’m lucky enough that my house was newly refurbished (the previous owner bought it as a project) so any of the work I’ve done has been purely cosmetic. I work on a budget so there has been a lot of upcycling and DIY both inside and out in the garden. I watch property shows, I research, and I ask about. I know that little things like the covering in my back add to the overall value of the house as well as keeping it in good condition.
2. Know your area
When I was buying my house, I wasn’t that great with Belfast areas and needed to choose somewhere that would give me no bother, was an easy commute to work and close enough to shops. There are some areas that increase in value just because of what’s around and I couldn’t have chosen a better area. There is a lot of development in the area, I’m surrounded by great primary and secondary schools, local shops, restaurants, take-aways and pretty much anything I could ever need now or in five years. This also makes it easy to sell/rent when the time comes! Sites such as Right Move & Property Pal have sections where you can check out local schools and area price tacking which are useful because not only can you entice future tenants with that, it’s also personally handy as I know that if Sean and I decide to settle down, we can keep up to date with changes in the area as we plan on staying local.
3. Know your costs
You have to be so savvy when it comes to buying a home and if you know you want it to be an investment, you have to be even savvier. There are great sites like The Mortgage Calculator which allow you to work out the costs for a new mortgage, re-mortgage etc. but it’s also handy to know before investing somewhere new that you can afford your actual and investment mortgages. If God-forbid something happens like another pandemic and you can’t rent out the place or sell it, you need to make sure you can cover all of your costs. It’s always good to have savings and account for extra costs as standard but especially with a house. As a landlord, you need to have yourself covered through insurance as well as savings etc. because there are times like during the pandemic where some insurers wouldn’t pay out and that’s not what you need!
4. Choose somewhere where you’d live
I think I’ve made it pretty clear that I love where I live. Not only is the area great for me but I now know it so well, I can see where I’d be able to invest when the time comes. Not only is choosing a nice area important but so is the interior itself. I know that when the time comes and I want to rent out my place, it will more than likely be fully furnished as they tend to go quicker so I’m making sure that for both my home and any other properties I may acquire, I decorate them to a standard that I’d be happy with after all, I want my place to be looked after and if the tenant knows I’ve put a lot of TLC into my home, then they’re more likely to care too. It also makes it easier to rent out a home when someone can imagine living in there themselves. I haven’t gone for any colours that are too out there and I even turned the third bedroom from a dressing room into an office so it makes it easy for me to talk about how versatile the space can be especially as it looks quite small at first appearance. If you’re not too comfortable with decorating then places like Ikea have great tools to help you virtually plan what your rooms could look like.
There are more tips I could give but I think these are the most important starting points when you’re thinking of eventually getting into property as you may struggle if you don’t cover the basics. Of course, you could use these tips if you don’t want to live in the property yourself too but if you’re like me and you’re not ready to jump straight into building a property portfolio, it’s always good to get some background information.
I think people these days have this investment mindset. Our every move is dictated whether we can make some profit out of it. The same goes with our properties, we invest on them hoping that they can be liquidated just in case.
That’s such an exciting thing! I would love to do something like this one day.
Great tips. The housing market is crazy right now!
Oh yes, knowing your costs comes so much in handy….like all the time! You won’t believe how much money you’ll save in excess fees charged unto you, for very minimal things you could have known forehand!
This was such an interesting read. I’ve often thought about investing in property. This really gave me a lot to think about.
These are excellent tips. My brother recently bought an investment property, and he had an entire binder of research that he did before he bought it.
Hope it all goes well for him!
I’ve always thought that it’s important to make decisions about our homes based on the possibility of resale down the road. We might not ever sell, but then again, we might!
I love the idea of experimenting to add value to your first home. You’re so right. We rarely stay in the first home we buy.
A Nation of Moms
Being a homeowner is such a big commitment. It is good to have a plan and to come up with a strategy as well.
Dr. Elise Ho
These are great starting points. I agree too, there are very few people who purchase their first home and make it their forever home.
Sara | mshealthesteem.com
Such great advice for turning your home into an income property! My husband and I are looking into buying a home, so this has come at a great time. We’ll keep this in mind when we find our place <3
I agree with this: Your first home isn’t your forever home so experiment and keep up with maintenance! I have changed my furniture for the last few weeks and finally I’m happy with the design that I want.
I’m so glad you’re happy! The experimenting and not worrying about landlords is definitely fun.
Angela Ricardo Bethea
Those are some great points and will keep this all in mind.
That sounds like a great idea and thanks for those wonderful tips and will keep them in mind.
You’ve done an excellent job here! It looks gorgeous. Long may your happiness continue.