The Inside Edge
Investment in Buy to Let properties has become a popular strategy in the UK for those developing a portfolio either for income or as a retirement investment. Compared with other investments property is seen as relatively risk as property prices only go in one direction over the long term yet the return on investment is competitive and steady over time. Those building investment portfolios often start with smaller properties such as flats, for which there is strong demand at the lower end of the housing market for singles, coupe sand sharers who have yet to buy a property of their own. Putting aside the financial criteria for investment (balancing the expected income with budgeted costs) finding the right property can make a big impact on your investment.
If you’re going to buy a flat or house for investment then here are a few top tips for you:
1. Try to narrow your search from the start by making a list of criteria for your prospective property. Work out which are the most critical, and which are less important to you. Does it need to be near where you live, for example, or be a certain size for the rental market you’ll be targeting?
2. Put yourself in the place of your future tenants. Make a list of things they’ll be looking for. If it’s a student town, how close is it to the University, town centre and other facilities?
3. Price. How much you can afford to spend will be limited by what you can borrow and what savings you have available but you might not need to spend all of it. Doing a budget to work out what return you’ll get on your investment may be a better way to decide how much to spend than simply buying a property at the top end of your budget.
4. Sale-ability. If you don’t intend on holding on the property for the long term, how easy will it be to sell on?
5. Do your research. Try to gather as much information as possible concerning the flat or house. If you’re serious about the investment then this time will not be wasted and you can avoid nasty surprises later. It’s worth checking any information given to you by the vendor and their estate agent unless it comes via their solicitor. Visit the property as many times as you need to feel comfortable.
6. The area is as important as the property. Research of the local area well amnd speak to neighbours and locals to get a feel for the place if you don’t already know it well yourself.
If you have any tips of your own, let us know in the comments below.