So, you want to get into property investment?
With the ability to maximise your income and secure a retirement plan, who can blame you?
Combine all of that with the fact that property market is currently booming – it’s no surprise that so many are jumping on the bandwagon.
But you’re probably wondering…
Where do I start?
Where do I look?
How do I even buy a property?
Well, it just might be your lucky day!
Because, with the help of these property investment tips, hopefully, all (or most) of these questions will be answered.
Figure Out What Kind of Investor You Want to Be
Before you start looking at properties, it’s probably wise to figure out what kind of property investor you want to be.
Once you determine what kind of investor you want to be, you can figure out whether you need to hire a property management company to assist with investments.
These companies can manage a property portfolio so that investors don’t need to worry about finding a tenant – it’s all left in their hands.
Property management companies can also respond to tenants’ issues, removing the need for an investor to be contacted directly.
This often proves to be a relatively hassle-free approach and is perfect for those who want to take a step back from the time-consuming day-to-day duties and demands of owning a rental property.
On the other hand, becoming a full-time landlord means you can own and manage rental properties as a primary source of income. However, this may mean having to leave behind your primary current source of income. If you’d rather not abandon your career, though, working with a property management company possible might be the best option.
Remember, it’s all about whatever best fits your lifestyle, so spend some time figuring out what works for you!
Figure Out What Kind of Tenant You Want
Another crucial factor when in property investing is identifying your ideal tenant.
Finding the best investment property for our targeted tenant can also help you discover the best properties to invest in – which, in turn, can get you one step closer to a successful investment.
Renting to students is one of the most popular techniques in the UK, particularly in (no surprises here) key university cities (such as Liverpool and Manchester).
Students can make good tenants due to the massive demand for student accommodation, but also because most students tend to be a bit more respectful (i.e. scared) of their landlords.
This makes them a little more likely to pay rent on time in order to keep their accommodation and avoid any issues.
The best way to approach this tactic is to:
- Invest in a property close to university campuses, restaurants, main transport links, and shops/supermarkets,
- Ensure your property has a high-speed internet connection, space for a desk area, and practical storage options,
- Choose a property that offers communal areas for ‘socialising’ (i.e. partying).
An alternative is to appeal to those seeking a ‘traditional family home’.
This could prove to be much easier to manage than a large student property with multiple individual tenancies (and could also be less of a hassle to deal with in general).
Again, you could choose to put a management company in charge of the property. Of course, there will be a fee involved, but the amount of admin time on your end should massively decrease.
Create A Workable (and Realistic) Budget
It’s vital that you create an intensive property investment budget before buying a property.
Having a budget in mind will speed along the process and also assist in finding the best possible property for your needs.
After all, you don’t want to use your property investment funds to pay above your means for a property that may have the same potential behind it as a property with a lower price.
Key costs to think about are:
- The property price,
- The monthly repayments (If using a mortgage),
- The reservation fee,
- Insurance (such as rental insurance).
And of course…
At the top of your budget list should be paying all of the necessary taxes involved with property.
In the Uk, this includes things like:
- Income tax
- Inheritance Tax
- Stamp Duty Land Tax
- Capital Gains Tax
Be sure to keep on top of the latest property news to understand tax changes, such as the recent Autumn Budget 2021 announcement.
Despite some predicting the worst, investing in UK property has arguably never been more lucrative. With demand rising and seemingly not a whisper of stagnation on the horizon, this could be the perfect opportunity to broaden your ventures.