Buy-to-rent, a good or a bad idea? The success of a rental investment depends on several factors. Here are some tips on this subject:
To ensure a secure retirement
Rental investment offers the opportunity to earn an income in the future and thus enjoyed a well-deserved retirement. Indeed, the active people of today are used to a certain lifestyle. Once they retired, they will derive less income from their pension. Therefore, income from rental investment adds a little extra to the pot.
To repay mortgage
What do you expect when buying a property to rent out? That the rent covers partially, if not all, the monthly instalment of your mortgage. Therefore, with some key early planning, you will be able to borrow over a longer period. This will result in low monthly payment and less financial effort.
A home to live in the old days
You live in an apartment or a house provided by your employer? It’s nice, but you must think about your elderly days. In fact, once you retire, this accommodation will be no more yours. In this situation, the concept buy-to-rent has a real significance. However, to make the placement interesting, be assure that the mortgage will be repaid before the end of your working career.
To help your family and transmit a heritage
In case, you possess a substantial capital, you can buy another house to accommodate your loved ones with an attractive rent. Moreover, investing in real estate by having a long-term approach helps build assets that can then be transmitted.
Rent to foreigners
The benefits of rental property are well known, especially in Mauritius where there is a strong demand. If your residence is located in very popular areas, including Grand Bay or Flic en Flac - two major tourist centres – it will appeal to foreigners.
Your rental investment will be supported by the growing tourism in the area and increasing number of expatriates. It will be viable in the long term.
Five points to consider:
- Before investing in real estate, you should take into account what’s happening currently in this sector. Why? Because losing money is a true risk in real estate. You may have to resell your property at a loss. Real estate properties can suffer from numerous market imperfections such as areas with low economic activity. In case of any doubt, it is better to contact a real estate professional.
- Since a property must be maintained regularly, it would be wise to save a little money obtained from rent for any future repairs or renovations, knowing that the latter may occur when you are about to enjoy your retirement.
- If you do not have time to manage a rental property, it is better to contact a real estate agency; sure this service has a cost, but it brings you peace of mind.
- Ask yourself the following question: do I want to live here later? If you are happy with the house, you are increasing the chances that it attracts people’s attention, hence having no difficulty in finding a buyer.
- Take the necessary time to choose your tenants in order to avoid problems when it’s time for you to dwell in your house.
