Thinking about a new investment opportunity in 2023 but not sure where to start? Why not try your hand at property investment? It can be a great way of drawing long-term gains – offering you a stable source of rental income that is essentially passive. On top of this, you can sell the property for a profit based on the capital accumulation that can build up over time.
Taking advantage of the wide array of investment properties for sale in the UK will be highly appealing to investors then – yet it is important to have a clear understanding of the overall process. Ensure your property investment journey is as smooth as possible by getting a handle on the ins and outs and reducing room for error by following these essential tips!
Location, Location, Location
Perhaps one of the most important attributes to consider is the location of your potential investment property – one useful way to scope out desirable areas is by looking at rental yields, for example.
When looking at location you should be thinking about the fundamental draws of the area too – infrastructure will play an important role as transport links will open up the scope of the tenant pool. Local employers and recent investment in the area are also important components to consider.
Consider the Costs
Having a firm grasp of your financial predicament is an essential part of property investment that may be taken for granted – having a clear understanding of the costs involved will allow you to get more out of what you put in.
Every property varies and costs are calculated in a number of ways – the time it will take to source, purchase and tenant each property will take up a significant portion of your time so considering these costs is vital.
With the amount of time and energy that goes into property investment you will get much more out of it if you are financially prepared for the process from start to finish.
What’s Your Strategy?
That’s the question any investor should be asking themselves before they undertake their property investment journey – it may seem easy to get bulked down with the multitude of options.
These could include outweighing the benefits of investing in residential or commercial property – some investors may be drawn to the lower stamp duty tax when it comes to commercial investment for example. On the other hand, others may be swayed by the easier time they will have securing a buy-to-let residential mortgage.
It may even be that would-be investors will prefer to try an alternative method altogether – focusing on strategies such as investing in Real Estate Investment Trusts (REITS) or holiday lets.
Know Your Tenants
Who will be living in your property? That’s the million pound question – and one that ensures you’re mindful of the entire process from start to finish as its not all about making quick gains!
If you’re renting to students, for example, then make sure the property has good links to the university campus and wider facilities. Renting to young professionals? They’ll need an excellent top-of-the-range working from home set-up!
Diversify Your Portfolio
Once you know your tenants, you can decide on the type of property that you want to invest in. Its not enough to just think of house or apartment – you need to consider whether you’re interested in off-plan property, a new build or a fully-furnished unit.
Each type of property will have its own unique advantages and disadvantages – yet it could also offer the opportunity to diversify your property portfolio! If you invest in off-plan student accommodation in a thriving university city and a refurbished house in flourishing redeveloped town then you can maximise your capital gains with two highly successful investments.
If you understand the rules and responsibilities when investing in UK property, you’ll be much more confident and self-assured in the process which can go a long way.
Be mindful of complying with health and safety standards such as ensuring all properties are fitted with fire alarms and practice gas and electrical safety. In turn, make sure the property is energy efficient and complies with landlord licensing laws.
Also make sure to adhere to your tenants’ rights including things like a right to privacy, tenancy deposit retrieval and other factors such as pets.
Remember – a good tenant relationship means that they will be more likely to extend their tenancy which means less chance of encountering any void periods.
Want to invest in property but don’t have the immediate funds at your disposal? Then a buy to let mortgage will probably be your likely route to securing an investment property.
A buy-to-let mortgage operates the same as a mortgage where you will make monthly repayments – with costs varying on how much your initial deposit was. Rates will also vary depending on what mortgage providers you’re working with too as they will be subject to different interest rates.
Look, we can’t promise you the world in this short guide, so it makes sense to consult the experts! Investing in property can be an enormous risk if you’re not fully aware of the entire process from beginning to end. You may perceive the mirage of capital gains on the horizon, but your property investment journey can have bumpy terrains that you need to be prepared for!
You may wish to consult a financial advisor if you’re unsure of your budget or of your overall goals. The advisor should have a good working knowledge of the current economic climate and can steer you towards making the best investment decisions possible.
It will also be worth speaking to estate agents who will know all about what locations are currently in high demand and boast good rental yields – having clear insight into the housing market will lessen the likelihood of your investment being a failure.
Finally, why not talk to a property investment company themselves? It may be the best option for you as they will specialise in assisting clients worldwide at any stage of their property investment journey.