Property investment
As one of the most popular investment types in the UK, property investment success is crucial only when met with certain criteria and considerations.
Constructive research needs to be carried out to ensure a maximum return on investment. With the right knowledge met with strong advice, investment properties can be a great way for anyone to produce positive results.
If you're unsure how to get started, but you know that property investment interests you, then our top tips will give you a strong foot in the door to a successful start in your journey. Perhaps you are looking for a single investment, or maybe you're interested in building an impressive portfolio, we want to put you on the right path.
1. Build knowledge
If investment is new to you, it is imperative that you take the time to learn the basics of property investment, before any major decisions. With the ever evolving property market moving and shifting constantly, it would be detrimental to not have sound knowledge built as a solid foundation for your business, and to be able to understand changes as they occur.
The internet offers a plethora of information, and you may also find it useful to seek an advisor who will provide you with impartial advice and cater to your individual options or requests. Questions such as, what is property investment? Why invest in property? - will be at the forefront of your mind, but you will want solid answers to create your positive and eventual cash flow.
Remember – stability derives from time and knowledge.
2. Stick to a sensible first investment
As tempting as it is to throw a lot of money at a first investment, it is worthwhile to go in slowly. There is always room to grow in the future, but in researching the property market and being sensible, you are far more likely to be able to build upon that rather than bite off more than you can chew.
Not spending more than you can afford will allow you to keep within a reasonable and realistic budget, and give you the chance to focus on the property itself and how to yield the best returns with quality you have.
Speak to an independent mortgage broker, not just your bank as they can search the whole of the market and give you best advice around financial options. We do not have an 'in-house' broker but can recommend a reputable contact for an initial discussion. Please click here to request a call back.
3. Go in with a good attitude
Nothing is ever straight forward, and we've no doubt you will reach hurdles along the way, but it is so important to develop a positive mindset, especially when it comes to maintaining a clear mind for those decision making moments.
Staying positive will help you to stay motivated, and as an investor, you'll want to be able to keep the cogs in motion, especially when it comes to possible challenges. Consider them learning experiences, and don't allow yourself to be defeated. If you perceive property investment as a continuous learning experience, then you can strive to build on your knowledge for those occasions when changes out of your control may occur, such as fluctuating prices or issues with tenants.
4. Property management: consider it
Property management is essentially the oversight of properties. It includes managing operations such as tenants, safety, finances and general operations such as communicating with third parties and ensuring compliance is one of the biggest responsibilities.
If you want to maximise the benefits of your investment, having a clear management plan in place is good to have as a priority. You may want to do this yourself, or you can work with a property management company. The more properties you accrue within your portfolio, the more you'll benefit from this type of plan.
5. Research your location
When you've made the choice to invest, one key consideration is location. Picking the right location means you attract the right tenants, reaping a high return for your property.
Major villages, towns and cities, wherever you look, are being rejuvenated and with that comes new opportunities for either business or leisure.
Looking for nearby amenities, transport links, schools and what job opportunities are available all go a long way to ensuring you have picked a prime location for your investment.
6. Consider your property investment type
Once you have a bit of a plan, you can and must begin to search the different types of property to invest in. Refurbished, new builds or off-plan properties differ significantly, and you'll benefit from going beyond the initial visualisation of simply having an investment property.
New builds come with the latest compliance regulations and a 10-year warranty, which is often what tempts first time investors to go for one of these properties, for peace of mind. Off-plan properties, or those yet to have been built offer equally popular interest as many potential tenants seek these plans out, so demand is high.
Refurbished properties are good for investors who enjoy renovation as a project. In their appeal, they can be more spacious and include more character, but often this comes at a greater cost, risk of uncovering something unexpected and one that you may be best swerving as a first timer.
7. Plan
When you are conducting your research into property investment, you should consider a strategy, and one that fits you the best. Investments, be it buy-to-let or by-to-sell, come with their own pros and cons.
Many investors opt for buy-to-let because the rental property market is currently thriving. What does that mean for you? Families? Students? Young couples? Target and be specific, because if you know what you want, what you want will find you.
With buy-to-sell, you'll be looking to make money, and your profit will come from work you oversee or provide yourself once you have the keys. This could be your long term goal, to buy, spend and profit, and that's OK. You just need to have a clear structure to your strategy, and suitable mortgages to go alongside it.
8. Increase the value of your investment property
Once your property is purchased, it should be your consideration to think of ways that will increased the value of it. This does two things. Number one, it can increase the amount you receive when you come to sell, and number two, it can also increase your rental income.
Simple cosmetic changes such as a fresh lick of paint can see an increase, or if you wanted to go a step further and renovate the kitchen or bathroom, whilst it may cost more, it would increase the rent or selling price further.
Spend time redecorating, or replacing fixtures. Modernising can widen eyes! Organise and oversee any necessary repairs, including structural and if your budget allows, considering extra space such as a conservatory or extension would be great ways to transform the space.
We appreciate the importance of getting it right when it comes to property investment. You can reap great benefits when you follow the right steps, and we wish you well on your investment journey.
