Property sourcing agents are some of the best people to befriend. They can be a substantial source of achieving your dream of getting a property of your own and starting a new journey as you can give them first-hand knowledge of what you look for, and they will find the right match for you all nicely packaged.
However, before becoming a real estate investor, you should be aware of some technicalities. What they are going to help you with and things you need to know. If you look at turning your dream into a reality by investing in London property, keep reading until the end.
- The property sourcing agents are excellent in their vital networking, and they will present you the options even before it is available in the market.
- They help you a great deal in communication, significantly if you are investing in foreign property.
- You can save yourself from scammers and fraudulent agents if you are in touch with professional Real Estate Investors.
Provided below are some of the few aspects you need to learn before becoming an aspiring real estate investor.
Evaluation of a Property
- If you cannot finalize the multiple properties, make sure you get a high ROI on any property. For doing so, always start with calculating the gross rental yield. All you need to do is divide the annual rental income by the total property cost while multiplying it by 100. This percentage is what results in your Gross Rental Yield.
- Another essential thing to keep in mind while property investing is to be familiar with CAP, i.e., Capitalization Rate, which takes the gross rental yield to another level. Subtract your annual expenses to that of your annual rental income. Divide the same to the total valuation of the property, and you get your Capitalization Rate.
- You also need to know about the Price-To-Rent-Ratio. It will help you choose from your local market and help decide whether the property is worth investing in.
Financing and Buying Preparation
- Down payment is crucial while investing in property. However, investors often treat it differently so that a homebuyer may get from 5% to 25%. Before jumping into anything, you need to consider whether you can afford to invest in the property.
- Your lenders often look for your debt-to-income ratio, as it favors them a great deal. The lenders usually look for 36-45% of your debt-to-income ratio from the investors. Moreover, divide your monthly debt payments by your gross monthly income.
- Lastly, your lenders place a lot of value on your Loan-to-Value Ratio. To calculate this amount, divide your total mortgage amount by your purchase price and multiply the final result by 100.
The Bottom Line
If you look forward to buying the right property for investment, or even residential purposes, always seek professional advice. Pearl Lemon Properties specifically help you in finding your ideal cases for investing in London property. So be sure to check them out and find the property you always dreamed of.