Property investment is not a one-size-fits-all solution, and the choices you make before you get off the starting block can dictate how your investment plays out in the long run.
To make the best investment decision, you need to be armed with knowledge and information. Here are some of the most important factors to consider before signing on the dotted line.
An obvious point, this is where most investors start the decision-making process. It’s not just the sale price that matters, though. There are other costs associated with most purchases, such as stamp duty, conveyancing and mortgage fees. Also factor in if the property needs renovation, or furniture for both rentals and owner occupiers, as well as general running costs. It’s also useful to have an idea of the return on investment (ROI) you expect to achieve.
Maximise your investment’s potential by choosing a property somewhere that’s up and coming rather than already at its peak. London might once have been an obvious choice, but the market there has stagnated recently compared to areas in the north of England and Midlands. House prices are much lower outside the capital, with huge rental and capital appreciation potential. Investors should also weigh up the pros and cons between a city centre investment somewhere like Manchester, or a property in a regional town such as Bolton, where major regeneration is underway.
Whether it’s a small studio apartment or a six-bedroom HMO, size is very important. Looking at the local market, areas such as London might see high rental demand for studio apartments as people look to live as centrally as possible without breaking the bank. In other areas, two-bedroom flats may be more appealing to renters, particularly for those who want to share with a friend to save money. Learn more on our podcast:
4. Target tenant
Deciding on your target tenant can help you tailor your investment for the most success. If you are happy to rent to students, university towns are obviously the place to start. For families, choose a property close to schools and other local amenities. If your target is young professionals, a central or commutable location, perhaps with more high end facilities and close to shops, bars and restaurants could be the best option.
5. New-build or renovation
There are plenty of new-build developments shooting up across the UK as the government drives to create more housing, while huge areas are also being regenerated involving the renovation – and often conversion – of commercial spaces into residential. Again, your choice may depend on your budget, your target tenant, or your preferred property location.
6. Stage of building
Linked to the above, you can choose at what stage of the building process you want to invest, after assessing the risks and potential returns. Off-plan investment has the benefit of often being much cheaper than the finished product value, while giving you the option to choose your individual unit when it is still in the planning stages, before it becomes available to the open market. However, some investors prefer to buy when something is nearer completion, while others invest once a property is up and running.
7. Level of involvement
You can fully manage your own property, or engage a management company to deal with everything for you – or go for something in between. A management company might be a good option for you if you’ve invested in a location you’re not familiar with, if you have more than one property, or even if you just feel you do not have the knowledge, expertise or time to deal with everything that comes with being a landlord.
At BuyAssociation, we can put you in touch with one of our independent partners to deal with your investment as well as property management.
We have some great property investment opportunities available across the UK, and our team of experts can help you find the best investment to suit your budget and requirements. Have a browse of some of our latest projects and get in touch if you’d like more information about what we offer.