So you’re keen to become a property investor. We can see why – it’s a business that can help make many people a lot of money and doesn’t require specialist skills or experience... but remember it’s also a career choice that brings with it a big dollop of risk.
One of the first steps in property investment is to part with a sizeable sum of money to buy your first flat or house: so it’s essential you’re well informed.
The most successful property investors are those that have done their research, completed some training and have a strong, supportive network around them. But why are these factors so important, and how can you harness them as you start out? We explain more here...
While many investors have achieved success without formal training, many others prefer to have some reassurance that they know how to make a sound purchasing decision.
There are training opportunities to suit most budgets, and a quick internet search can help you find online webinars or local events that have no costs attached at all. But be mindful of these types of companies - although there are lots of genuine trainers out there willing to share their knowledge and experience, there are some less desirable ones.
If you’re about to invest thousands of pounds in a property deposit, it may prove invaluable to spend a few hundred to gain knowledge and expertise from a highly reputable source before making the big buying decision. Our sister company, Progressive Property - the UK’s biggest property training company may be worth a look: www.progressiveproperty.co.uk
While training is, to some degree, optional for a property investor, doing your research is absolutely crucial. Here are just some of the areas that you should research before making any decisions:
> The local area - What’s the area like and who lives there? Is it mainly families, young professionals or older couples? How well connected is the area in terms road links and public transport? Will it suit the type of person that you imagine would live in your property?
> Prices - How does the price of the property compare against other similar sized properties nearby? If there’s a big difference, there’ll be a good reason.
> Local rents - It’s no use buying an investment property if the rental price you need to charge to cover your costs is more than the typical rent in that street. Use example rents for your target market to work out your maximum property price, these often known as ‘comps’ in the property world.
> Town planning - Are there any big developments or changes in the town that could affect the value of your planned property investment? If major construction work is happening close by it could deter renters from choosing your property. On the other hand, if regeneration is on the cards, the value and desirability of the house or flat is likely to increase more in the long term.
> The home itself - Don’t scrimp on surveys as these are very important in identifying issues that could cost you in the future. It’s cheaper to walk away from a purchase than to fund major renovations.
No property investor is an island. You need a strong network of partners and suppliers to get the best out of your new business. There are some key professionals you should build good relationships with, including a good accountant/financial advisor to make sure you’re getting the maximum profit and a good deal on your mortgage. A decent solicitor will help ensure your legals are covered too – they will check the deeds and manage the transfer of money.
If you’re operating a buy to let you will also need good, reliable plumbers, electricians and other contractors that you can call on for help. The other option is to appoint a lettings management company to look after this sort of work for you. Here at Progressive Lets, we can help with that – our email address is firstname.lastname@example.org if you’d like to discuss our services.
Equally important is to network with people that have a good knowledge of the town or city you’re operating in. They can keep you abreast of new developments that could affect you, from new rental legislation or construction plans, to vacant properties that present new opportunities for you.
Good property investors take time to listen and learn from those around them, at every stage of their property journey.