Investing in the European Real Estate Market: Important tips

The European real estate market is one that holds lots of promise for savvy rental property investors. However, these promises can quickly turn to disappointment if you invest in real estate without adequate preparation. Are you considering embracing rental property in the European market?Here are important tips to keep in mind.

Have a perfect understanding of your target market

The real estate market in Europe fluctuates with time across the various countries.Earning potential can drop without warning. It is therefore important to ensure you are fully immersed in the workings of the market for each of the countries you are looking at.Being able to predict the market is the sure way to get good returns on your investment. I spoke with TV's Nick Marr an overseas investment specialist, who told us this advice.

Plan your finances carefully

On the surface, this looks straightforward and self-explanatory, but rental property financing can quickly become complicated. You need to keep in mind the fact that investing in an income property is different from purchasing a home.With an income property, it is difficult to know how your tenants will treat the property and the amount of work needed to be done on the property each year. This is why financial stability that includes a low interest loan is vital.

As a rule of thumb, you need to ensure you can afford loan repayments on your property without rental income. Banks expect you to make payments even when you do not have tenants.

Decide on care for the property from the outset

Managing a rental property is a challenge. The landlord has to assume several responsibilities including writing contracts, working out insurance plans, handling maintenance, screening tenants, collecting rent and so much more. Are you up to this challenge?

You have to decide if you need to hire a property management company to take care of these responsibilities. Most property management properties in Europe will charge between 5 and 10 per cent of the monthly rent to manage your property. While this is a considerable amount, it will protect you from possible legal issues arising from negligence or oversight.

Start your investment with the right property

When looking at the European Real Estate market for your investment, it is important to start out low and work your way up to more challenging properties gradually. Some of the rules that should guide your decisions as a beginner include buying properties that are in good condition, buying personal residences and changing them to a rental property, avoiding the prize properties and buying properties that meet your personal tastes (It helps if you like the property you are renting out).

When you have achieved success with properties selected with the above rules in mind, you can move on to the challenge of buying and renovating dilapidated property.

Screen Tenants Properly

Once the basics are in place, you can rent out your property to tenants. However, it is important to avoid renting out your property without background checks. You need to ensure your tenant will pay rent every month and that they will not pose a threat to the condition of your property. The screening process will allow you find the right tenants and should be covered by any competent property management firm.

Investing in European income property may be challenging, but, with these basics, you will be properly positioned to achieve success with your first property.