Very few people who are made redundant and receive a large payout from their previous employer use that money wisely. Some simply fritter it away without cutting their costs back while they look for another job at the same level they had previously. Others invest in stock and take whatever work they can until something better comes along. A much more powerful option is to become a landlord.
Consult a Mortgage Broker
Once you know how much your payout is going to be, the very first step is to find some part time work that will tide you over. You don’t want to erode your payout at all until you know what you will be doing with it. Consult a mortgage broker rather than your bank as you will get a much better idea as to how much you can borrow and what options are available if you look at multiple lenders rather than one.
Buy Property That is Rentable
Many landlords make the mistake of sourcing a property that they would like to live in. Perhaps located in the leafy suburbs of their city. Unfortunately these tend to rent less well in most cities than either city center flats or those near main transport hubs. Renters are usually younger, commute to work or want easy access to the city. Bear this in mind when selecting your property. Furnish and decorate it for low maintenance and low cost. It doesn’t matter whether you would like to live there simply that it’s suitable for your tenants and won’t cost you much to refresh and repaint when they move out.
Grow Your Portfolio Rapidly
A recent survey over in the UK showed that to make a comfortable living and give up work a landlord will usually require over 10 properties. Make sure you bear this in mind and take every opportunity to raise finance against your existing property when prices rise and re-invest all your early profits from rent into acquiring more property. This will mean a lot of work initially as you maintain the portfolio as well as sufficient part time work to pay your personal bills but in the long run it will take you closer to your dream of stay at home income much more quickly.
Protect Your Investment
Another mistake many landlords made before the recent property crash and economic difficulties was assuming that things would always go smoothly. It is true that for the most part your tenants will pay on time and things will go well. When they don’t, having a good rent guarantee insurance policy in place will alleviate some of this stress and make sure you continue to receive money and possibly even legal support in the event your tenant defaults or damage the property. You wouldn’t drive on a dangerous freeway without car insurance so don’t take a spin uninsured with your financial future at risk.
Other Opportunities to Grow
As an entrepreneur you would probably not be satisfied simply building up a portfolio. Your work-from-home income can be further increased by using the experience you have developed at finding tenants, and collecting rent to help other landlords. You may have to be licensed in some States whereas in other jurisdictions you are able to offer these services without restriction. With rental agents often charging 10% of the rent there is a huge opportunity for you to step in here and help other small landlords join you in the 10+ property club by advising and supporting them for a fee.
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