Property investment in the UK is now a more popular venture than ever before. The relative strength of the market in this country has meant investors in this asset class can welcome strong yields and better returns than they might get in other areas.
However, investment in property is a complicated task, and investors need to make sure they are armed with the tools to lead them to success. We look at a few of the most important traits that every successful property investor will possess.
Know the market
Property investment, dependent on how you spend, can be a hands-off venture, but that doesn’t mean you don’t need to know the market. It may seem like when the sector is strong that all you need to do is buy stock and wait for the returns, but there’s more to it than that.
A strong investor will have in-depth knowledge about the sector and the place they are investing in, learning all about pricing, yields and demand, as well as who they are marketing their properties to and how consumer habits can change, as a way to maximise their income.
Have the right mentality
No matter how small your portfolio, it’s important that you see every investment as part of a larger business venture. Setting goals and objectives for your business will allow you the chance to work towards them in a more structured way.
Seeing an investment as a business also allows you the chance to see the big picture, allowing you to set goals that you ultimately want to reach down the line.
Keep a good reputation
Having a good reputation will be key to success, and it’s important to remember that as an investor you will be working with people, which means the way they see you is important. Whether you’re working with property management companies, tenants or letting agents, your reputation will help them decide if they want to work with you again in the future.
High ethical standards, approachability and always operating in a structured and professional fashion will help prove you as a trustworthy investor who is worth working with.
Find your focus
Student property, residential lets, commercial units – the number of property investment options is bigger now than ever before. All areas of the market have their own strengths, and with all performing well, the temptation is often to spread your bets and get the best of every sector.
However, it’s actually better to develop a focus. Doing this can help you to gain a depth of knowledge in your chosen sector, which allows you to spot fantastic opportunities instinctively and means you will be best placed to push your portfolio onto success. This extensive, expert knowledge of a particular sector can be key to giving you an edge over your competition.
Stay up to date
The nature of property is that laws, tax rules and other regulations can change regularly. The pace of changes can make it hard to keep up, but the problems that are caused by not doing so are plentiful and damaging. Investors could face fines, for example, if their properties are not meeting current regulations.
Keeping up with changes can be time consuming, but it’s a priceless venture in the long run and it’s important to set aside a bit of time every month or so to make sure there are no new rules or regulations you’ve missed.
Know the value of the customer
Your tenants are your source of income, and as much as the current level of demand would make it seem like there’s an endless supply, respecting the value of the customer will be important for any investor.
Paying attention to details, making yourself available and approachable and dealing with issues quickly and effectively will paint you as a good customer services rep. It means people will be more likely to want to deal with you in the future, while current tenants may also refer others to you based on their positive experiences.
Be aware of the risks
As strong as the property market is, it’s not immune to financial issues and the possibility that something will change, potentially reducing the value of your investment in the short term. While the danger of this is very low at the moment, risks do exist and it’s important to be aware of them.
A prudent investor will have a forward-thinking philosophy that allows them to analyse future risks and take actions to help minimise the possibility of this being problematic to their portfolio. Even just being aware of what could potentially happen will give you that edge to take action if something does go wrong.
Know your limitations
As a property investor, you may have developed an in-depth knowledge of the market itself, but it’s unlikely that you will be an expert in every area of the sector. Knowing your limits and looking towards areas where you might need help is a real strength, allowing you the chance to make sure you are not falling short in places where you perhaps don’t have expertise.
Whether it’s working with a property management company, an investment consultant, financial advisor or any other professional, having the foresight to bring someone else on board in areas where you know you are not particularly well versed is a real strength, never a weakness.