Choosing to invest in property is a great way to create more income and also set you up for future financial security. But how do you decide which property is going to be a worthwhile asset?
There are many factors to take into account when you’re searching through the many properties out there.
Here are 5 things to consider when making your decision –
- What kind of tenants are you catering for?
There are many different kinds of tenants who are looking for a rental property, including families, young professionals and students. Your decision about which tenant-type will affect what geographical area you look at (families will want to be nearer to schools, for example, whereas young professionals will look for nearby bus and train facilities). A house of multiple occupation (HMO) works well for students and young people but will you need to consider purchasing a big enough house which will lend itself to the change in purpose.
- Would you buy a newer or older property?
Older properties tend to have more issues that need to be fixed and may be in need of renovation, but then that will be reflected in a lower price. It depends on if you’re willing and able to do some refurbishment work yourself or happy to pay for it to be done by professionals.
More modern properties can be more attractive to tenants but will often be more expensive.
- What geographical area are you looking at?
If you are planning on managing the property yourself, you will want to have your investment close to home so that you are able to nip round to deal with issues as and when they come up. Consider what area your tenants would like to live in, does the place you’re looking at have an appeal and good facilities?
- What is your budget?
You will need to calculate what mortgage you can get and make sure you shop around for a good deal. The internet is better than going to a bank’s branch for looking at all of your options. What amount of rent will you need to receive to make this work, factoring in also landlord insurance and repairs?
- Be guided by logic rather than emotion
Bear in mind that you are in the process of looking for an investment buy which others will be living in. You are not looking for your next family home, so make sure it’s a decision of the head not the heart. It might not be the area or style of house that you prefer but if it fits the requirements of your would-be tenants and checks all the other boxes, then it’s likely a good option.
If you are looking for further advice on property investment, take a look at the property mentoring services we provide at Nick Fox Property Mentoring here. We offer a range of mentoring packages to suit all needs.
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