Finding the right property is crucial when it comes to investing in buy-to-let property. Your decision at this stage can have big influences on your profit down the line, no matter how well you develop or market the property.
So the question is – what should you look for in an investment property?
Here are 6 things we think are important to consider
1. Price. Getting the initial price correct is crucial as it will affect both your annual yield and profit made on resale. It’s a good idea to compare the property you are looking at to others in the surrounding area, and look at previous sales of the property. Be careful when it comes to very cheap property though as it may have some major underlying issues that can be expensive to fix. Make an informed decision on how much you are willing to pay for the property based on area, condition, potential rent, etc., negotiate and stick to your limit!
2. Neighborhood. The area the property is located in has a massive influence on the types of tenants that you will attract. Near a university you’ll attract students, near good schools you’ll attract families with children, near good public transport you’ll attract commuting business professionals. This all needs to be considered when deciding if the property is right for your aims and goals. All of these areas come with advantages and disadvantages, so make sure you know what you’re getting yourself in for.
3. Schools. Following on from the last point, good schools in the area attract families and can add value to the property. Check the quality of the school before you make the investment, as this can affect the value of the property. Remember to take into account primary and secondary schools, and find out which schools the property is in the catchment area for.
4. Maintenance. You might think you are getting a bargain, but if a property has big renovations that need doing or high on-going maintenance, this is going to make a dent in your profits. Make sure you get the property assessed by a qualified builder so you are fully aware of the work that will need doing and the cost of this.
5. Rental demand. There’s no point having a great property, but not being able to rent it out! Check if it is common to rent or own in the neighbourhood it is found in, find out the average length of tenancy for the area, and see if nearby properties have struggled to attract tenants. If your plan down the line is to rent the property out rather than sell straight on for profit, this is vital!
6. The news. The news can bring positivity or negativity to an area. See if the area has a reputation for anything – for example a great university or regular tourism. If an area is evolving, this is a great time to buy property before having a great reputation causes the property prices to rise. It works both ways though. You also need to make sure the press aren’t saying bad things about the area and there’s not a high level of crime.
We can save you time and search for a great property investment on your behalf. See here for more information. We’re here to help you with all things Property Investment!
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