Property investment is one of the most popular investment markets, attracting new investors and seasoned veterans alike. But regardless of your experience, there are many things to consider when deciding which avenue to choose. Here are some sound tips and tricks that will help you when planning your next property investment.
Choosing the right investment
You’ve made the decision to invest in property, but you may not have considered the different options available to you. If you’re leaning towards residential property investment, consider whether you want to invest in an off-plan new-build property or renovate a house yourself. Whatever state the property is in, you should also think about your long-term plans – will this property be sold on immediately or let to a residential market?
If you want to stay away from residential investments, you could consider commercial property such as investment in retail or office space. Alternatively, you could purchase a property with a view to letting within the holiday market. Such properties will require a different approach to residential lettings so it is important to consult a guide to holiday lets and do your research beforehand.
Identify your strategy
Once you have decided how you want to invest your money, you need to develop a strategy for ongoing management so you can make the most from your investment. Consider whether you would like your investment to be long term or mid term, and whether you want to invest in a single property or begin building a portfolio. If you choose to invest further, will you focus your funds on your current property or spread your finances across multiple investments? This process is about balancing finances and risks to achieve your long-term goals.
In addition, when making a long-term investment you should ensure that you have done your research into your chosen market. Every market alters over time, but although you can’t predict the future, you can prepare yourself by identifying a market that is experiencing steady growth.
Plan your finances
It may be that you already have the funds in place to invest in property, so the planning of your finances will simply be tied to your investment goals. However, if you’re seeking funding from a bank, building society or another source, you will need to carefully plan your investment in advance to help you to both choose and manage your funding effectively.
The first step in organising your finances is to get a mortgage in principle. By securing this in advance, you will be better placed to move forward once you’ve chosen your investment. In addition, a mortgage in principle will give you a better idea of what funding you will be able to secure once you select a property, so you can choose within your means.
Although you may have plans to grow your portfolio in the mid to long term, it’s helpful to start small initially. Not only does this approach often appeal to banks and other funding sources, but it can also help you become comfortable in the market you have chosen. Select a property in a cheaper area to reduce the amount of financing you require, or choose a smaller property in a popular area to boost your chances of receiving interest.
Additionally, a slow approach will allow you to reassess your chosen market so you can ensure you are continuing to invest your money wisely. If you feel your market is no longer as lucrative as you had once felt it was, you can consider investing additional funds elsewhere. This could mean choosing a different party of the country to invest in, or perhaps selecting a new property investment area altogether, such as commercial or holiday lets.
Know your audience
Once you have chosen a path, ensure you have done as much research as possible into the market you have chosen. Specifically, select the audience you wish to target and look into the possible marketing strategies you may need to adopt in order to capitalise on your asset. These strategies will differ significantly based on your plans, so whether you’re selling or renting, make sure you adapt accordingly.
This research should play a part in every step of your investment journey, from choosing the right property for your market to taking the right marketing photographs. Remember – the more work you do now, the more income you can expect further down the line.
Our comprehensive list of tips and tricks will help you get off on the right foot when you begin your investment journey. Good luck!