Purchasing your first investment property is a big decision and in reality, it is not a way to ‘get rich quick’. Careful planning, understanding your commitment and the pitfalls which may lie ahead will help you achieve the best returns from your hard earned cash.
We’ve rounded up our top tips for new property investors.
Understanding your financial commitment
To own any property you will need to have a good grasp of your finances. Understanding what is financially required from you will play a key role in your success.
How will you finance your investment? If you are not a cash buyer, seek advice from a trusted and professional mortgage broker.
How will you cope financially if there is a void period? Do you have funds to cover your mortgage if you have a problem with your tenants? By understanding and preparing for both the ups and downs of investments will ensure that your purchase stays on track.
Where should you invest?
You don’t have to just pick something close to home. Put some time into researching where in the UK offers high yields. If you are looking for a residential buy-to-let, is there a demand from families or young professionals? If you are investing in student property, is there a credible university nearby? Will the area appeal to students?
Asking these key questions will help drive a successful property investment.
There is a wealth of information available to you, so use it! Visit local estate agents and look online to establish what the local vacancy rates are. If they are high, steer clear and research somewhere else.
Have you considered all of your costs?
Understanding what you are liable for will determine your outgoings. Will you need insurance? Will you pay water rates? Will you need to pay legal fees or management fees? Make sure you have a clear view of how much your investment will cost before you invest.
How will you manage your property?
Do you have time to juggle your commitments alongside managing a property? Will you be able to contact a plumber if there’s a leak at 3am?
Although cutting a management company out in the early stages of an investment may save you money, think of the bigger picture. What will happen when you own 2, 3 or even 20 properties? Building a good relationship with a reputable management company will help create a hands-off investment and will provide you with instant access to potential tenants.
Use your head, not your heart
We’ve seen it before. If you buy with your heart don’t use your head you probably won’t get the maximum return on your investment.
Consider what’s best for your returns. If you have purchased a house which requires renovations, remember that you will not be living there.
What is your exit strategy?
How long do you want your money tied up? What do you wish to receive in the end? If you are investing for income, what’s your strategy when you sell? If you suddenly need to sell, how would you go about doing so?
Should you keep the property for the duration of your mortgage, or rent it out for monthly returns and then sell it when the market peaks?
The answer is to have a range of plans. It’s important that you have an idea of how to use your first property investment as a springboard for creating a strong property portfolio.
The Experience advantage
Now that you’ve read what you should look for in your first investment property, why not click here to view a selection of exclusive UK opportunities from property investment firm, Experience Invest.
Experience Invest undertakes compulsory due diligence to verify the buying procedure and to satisfy that the owners of each individual project are in a legitimate position to promote and sell the investment.
Properties are sold off plan and require a cash investment, enabling you to invest without obtaining a mortgage.
All opportunities have an assured rental period and as all opportunities are off plan, investors will receive interest on all deposited funds.
Many opportunities have a clear exit strategy and have an appointed specialist Management Company to ensure that you receive stable returns.