Published On: Tue, Feb 6th, 2018

Must-Read Tips for Anyone Investing in Property

Must-Read Tips for Anyone Investing in Property

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If you have decided that you want to invest in property, there is a lot that needs to be taken into account. Property has long been one of the most popular forms of investment, providing people with a stable and consistent sum of money on a monthly basis. When going down this route, it’s important to see it as a long-term investment. It is certainly not a get rich quick scheme. With that being said, read on to discover some of the must-read tips for anyone investing in property.

Think about how hands-on you want to be – When buying a property for the purpose of renting it out, you really need to think about how hands-on you want to be. Do you want to handle everything yourself? Or, do you want an agent to take over? If you opt for the latter, you are going to have to pay a management fee. Nevertheless, they will have a good network of electricians, plumbers, and such like, and they will be able to deal with any issues you have. You will usually be given the option as to whether you want to be notified before any work takes place, or whether you are happy for the management firm to have complete control of this.  Of course, you can make more money if you opt to handle this yourself. However, you will need to make sure you are available at all times to deal with anything from repairs to viewings.

Know the pitfalls – This suggestion is not provided to put you off of property investment. However, it is vital that you are aware of the negative aspects that are associated with this. This will make sure that you are prepared for anything that comes your way and you do not experience any nasty surprises.

Consider all of your options – You need to consider all of the options that are available to you when investing in property. A lot of investors will look for properties close to where they live. Nevertheless, you may find that there is a better investment opportunity in a different town. You should cast your net wider and look for areas that have a sizeable university, or are popular with families, and have good commuting links. You may also find that it is better for you to purchase a property at a lower price and then do it up.

Don’t be over ambitious – It can be very tempting to get carried away when starting off in property investment. After all, we have all heard the stories about buy-to-let millionaires with their vast portfolios. But, while the prices of houses may rise in the long-term, you should never invest for short-term capital growth, you should invest for income. This means that you need to go for rental yield and remember all of the expenses that are involved. So, how do you calculate rental yield? This is the yearly rent that is received as a percentage of the price of purchasing the property.

Know your market – When investing in property, it is vital to know your market. Who is your target audience? This will shape everything you do, from the way you approach marketing to the type of property you buy. Don’t look for a property you would like to live in – look for a property that appeals to your target audience. It will also influence whether you make the most of structural engineering services to improve the property, for example, you could get a swimming pool installed so that you can appeal to luxury clients that have a lot of money to spend.

Do the maths – This may sound obvious, but you would be surprised by how many people underestimate the cost of this type of investment. It is important to take the time to write down all of the expenses that are associated with buying your new house, no matter how insignificant they may seem. This includes everything from mortgage expenses to maintenance costs.

Location is everything – When choosing a property, location is everything. You need to select an area that is promising. This does not mean going for the cheapest or the most expensive area. This means choosing an area that people are going to want to live in. There are numerous reasons why people may wish to live in the area you are considering. It could be a place that is ideal for students, or it could be an area that has good schools, making it a wise choice for young families. Or, maybe you are considering an area with exceptional transport links, making it an ideal commuter spot? No matter what applies, you need to match the type of property you have the money to fun and want to buy with the location that individuals who would want to live in those houses would choose.

Research, research, and research some more – If there is one thing that property investors do not do enough of, it is research. It doesn’t matter what your background is, you need to spend a considerable amount of time researching the market on buy-to-let. How much do you know at present? Do you know the benefits and the risks? There is never such a thing as too much research. The more you know, the better you will be prepared for the journey that is ahead of you.

Get more involved – Another tip for investing in property is to get more involved. If you have not already, watch more videos, listen to audiobooks and podcasts, read, attend property meets and events, and joint buy-to-let property networks. You will be surprised by how much of a difference this makes. Plus, connecting with people who understand what you are going through will make a massive difference.

Embrace technology – Almost all businesses today have embraced technology, and the same should go when it comes to managing your portfolio. A lot of investors today manage their entire portfolios from their smartphone. So, if you have not already, embrace the technology boom that is going on at the moment. There are so many apps available that will make your life easier, giving you quicker and seamless access to everything to do with your property.

Have an exit strategy – When investing, timing is everything. You need to know when to get in, but this is only half of the battle. You must ensure you watch over the market with a vigilant eye. This will ensure that you know when to pull out of certain investments, if indeed, you need to. There are going to be times in life when you need to cut your losses and move on. Hopefully, this will not happen to you. However, you will save yourself a lot of stress and time if you have a workable exit strategy in place to begin with.

Consider investing overseas – Earlier in this post, catching your net wider was advised. But have you ever considered investing overseas? Of course, this is not going to be a viable option for everyone, but it is something that you should consider carefully. After all, if you do not have a lot of confidence in the property market domestically, you should try making the most of foreign markets and currencies that are not going to demand such high levels of investment.

Constantly review your plan – You should always plan ahead, at least six months in advance, and you should keep clear and concise notes of your investment process. No two six-month periods are ever going to be the same when you are investing, and so you need to review your plan on a continual basis to keep on top of your investment.

Avoid over-leveraging – You should also attempt to stay away from utilising in excess of a 50 per cent mortgage to buy the house. At the beginning of your portfolio construction, this could be a challenge. However, as time goes on, it will become more and more feasible. Re-mortgaging is a bad idea, despite appearing attractive on the surface. If you do need to go down this rate, you should lessen the loan duration. This is because the longer it goes on, the greater amount of pain it is going to cause you later in your life.

As you can see, there is a lot that needs to be taken into account when investing in property. Nevertheless, if you follow the advice that has been presented to you in this blog post, you should find that the process goes a lot smoother.