If you’re interested in taking your first steps into property investment, read our guide below on ten essential tips to consider.
- Do your Research
Do you know the risks and the benefits of investing in property? If you’re not sure what the risks are, you may want to take a closer look. Compare different types of property investments and compare other types of financial investment too. That way you can be sure you are maximising the real potential that your money..
- Choose a Good Place to Invest
Invest in a home that’s located in a good place to live. Does it have good transport links? Are the local schools good? Match your potential property with the type of people that would like to rent or buy in the area.
- Do your Sums
Work out what the costs of local houses are and how much you’re probably going to earn in rent. Some lenders want the rent to cover 125% of the mortgage payments in addition to a 25% deposit.
- Shop Around
Don’t accept the first mortgage offer you receive, shop around and get the best for your money. Speak to an independent broker and find out which type of mortgage is good for you.
- Who is your Ideal Tenant?
Think about your ideal tenant, what do they want from a property and who are they? If you plan to rent to students the property needs to be comfortable for shared occupation. If you’re renting to young professionals or families you’ll need something modern.
- Invest for a Long-term Income
While some people have been lucky enough to become property millionaires, you should invest for the long-term. The rent your prospective tenants pay should be your most important return for your buy-to-let property.
- Think About Improving a Property or Looking Elsewhere
Buying a property so you can improve it is a good way for you to boost your investment’s value. However, you’ll need to make sure the price is low enough to begin with. You may also want to consider looking to buy a property in another town if the town you live in does not offer you a good investment opportunity.
Don’t be afraid to negotiate the cost of a house. If you’re not part of a chain then negotiate as much as you please. Know the market, find out what nearby homes are selling for and make an offer.
- Know What the Negatives are
Before you part with any cash make sure you know what the negative aspects of buying a property are. If prices fall can you carry on with investing? If prices rise can you put the rent up?
- Using a Letting Agent
Do you want to use a letting agent or are you happy to be ‘Hands-on’? Agents will charge a management fee but will deal with any issues that arise. Would you rather deal with the issues and call out plumbers and electricians yourself?