You feel that you are an adult and want to live independently from your parents, of course, thinking of having a private house. So even if you have just married a spouse, it will certainly be uncomfortable to live with your parents, so that the first house becomes a dream residence. Buying a dream house is a big decision. You also need to make sure your financial condition for daily living is not disturbed when buying a home or afterwards. Here are 9 tips for buying a first home
Think of Your Long-Term Goals
What is the purpose of buying a house? Is it really where you live? Don’t just buy a house but then you don’t occupy it, especially if you buy it in installments. Prioritizing a house as a place to live is safe in your hands, not just buying because the price is cheap but the location that is too far away makes you reluctant to stay there and choose to rent an apartment or rent a house in the city center. You can do this if the house you bought has paid off and wants to make it an investment. Avoid burdening your finances by repaying your home while paying rent for an apartment or rented house. (Also read: Buy a New or Used House?)
Choose the type of house that suits your needs
In a business, the price factor does play an important role for the ongoing transaction. If the price is too high, then the buyer will find it difficult to reach a deal, whereas if the price is too low, you as a businessman will get a loss. This applies also to renting a house. You as a rental owner must also seriously think about this. Even though you have the status of a homeowner, you cannot arbitrarily determine the price for your property.
When determining the rental price, you also have to think about the side of tenants and market prices. In achieving this, it is not an easy matter, but with a step in strategy and technique, you can determine the right rental price and benefit you and your tenant.
Here’s how to determine the price of a rental house that is right for you:
Calculating Rental Prices with Cap Rate
Rental prices from rental housing properties generally range from 3-5{34817b21f0a3eddd7057b2700021c59ef0c218dc727f90c9b577fca2808be7f5} per year from the value of the property in question. So if you have a house in Virginia Water worth £32,000, then a reasonable rental price will range from £320 – £400 per year.
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One note from this formula is that the value of the cap (capitalization) of the house is in the range of 3{34817b21f0a3eddd7057b2700021c59ef0c218dc727f90c9b577fca2808be7f5} – 5{34817b21f0a3eddd7057b2700021c59ef0c218dc727f90c9b577fca2808be7f5}, depending on the condition of the property, location, and so on.
The first technique that you can do to determine the appropriate rental price is to copy or modify the price of the same type of house. All you need to do is look for the type of house that is the same as your home and find out the rent price. With this strategy, the price you specify will not miss the market price. Market prices must indeed be a reference and standard for you to determine the rental price for your property.
In terms of price modification, you may not be too far from the market price. This is again because consumers are very sensitive to the slightest change in property prices. As a rented owner, you have the right to make a profit, but again you also have to race against time so that you can get rent immediately and the property is not protracted.
Adjust to facilities and other costs
Read Also: property for sale in Virginia Water
If you do not find the same specifications as the property, then you can make a different rental price. However, one note that needs to be noted is that the different rental prices must be followed by elements of supporting property facilities. Do not let you raise prices but are not balanced with better property facilities. Property facilities such as air conditioners, mattresses, cabinets and other home appliances can be used as a reference for price differences. But if it turns out that tenants don’t want the facility, of course you have to be flexible and want to reduce the rental price. Another thing that makes you have to make price changes is other costs such as painting costs, additional interior or exterior functions of the house. Calculation of different rental prices is indeed entitled to landlord to avoid large losses.
Consider the Conditions Around the House
Other things that need to be considered in determining rental prices are the basic factors around the house. Of course it is very natural if a property that has a strategic location has a rental price that is different from a property that has a location far from road access and public facilities. Other things about the conditions around the house such as a calm, healthy environment and friendly neighbors or vice versa can also be a reference in determining the rental price for your property. You can discuss this with your tenant or if the tenant has other reasons, you must also be open and willing to discuss the reasons stated by the tenant.
Now, do you know how to determine the right price for renting a house? Good luck with his home rental business!