5 Top Tips for Buying Investment Property
We’re now into September and judging by the weather, our British summer could officially be over soon! Autumn is traditionally a busy time for landlords and the lettings market, so we thought now would be a great time to present our 5 top tips for buying investment property.
- Know Your Market
You need to review such things as local schools, transport links, proximity to the high street and crime rates prior to buying your investment property. You will also need to understand what style and size of property works best for local tenants. By doing your homework and understanding your market really well, you will be able to sniff out a property bargain 100s of miles away!
- Size of Property
1-2 bed flats and houses tend to rent out quicker than 3-4-bedroom houses as there are more people looking for the smaller properties. Tenants for the smaller properties could be young professional sharers or couples renting together for the first time.
Larger houses tend to be let out to families. Furthermore, depending on your investment property’s location, it may also be suited to a HMO arrangement. Tenants could be young professionals or students. Renting a room, rather than the whole property is economically more viable for the tenant. Renting to sharers can be much more lucrative for the landlord too.
- Look to Add Value to Your Property
Once you understand your market really well, you will become aware of which properties rent out the best and also command the highest rent. Adding an additional bathroom or subdividing a bedroom can very often increase your yield. However, if you are to do this, you need to ensure that your returns exceed any costs.
Prior to you purchasing your investment property, you should run your numbers and take account of any maintenance budget that you may need.
- Don’t Rush into A Property Purchase
If you are a first-time investor, you should do your homework prior to your property purchase. If you are uncertain of the area to invest in, you should undertake some comprehensive market research.
A lot of this can be done online. However, there’s a lot to glean by speaking to property experts who know the area well. This is where Robert Oulsnam & Company can help you. We always welcome investors and are more than happy to speak to you over the phone or in person to ensure that your property purchase is a success.
Prior to your purchase, you should ascertain your rental yield, potential capital gains and rental price growth for the property. If you are happy with your research and your numbers, then you should proceed with the purchase.
- Have an Exit Strategy
Whenever you buy property, you should have an exit strategy in mind too. Do you intend to buy the property to develop and then sell on immediately? Will you be letting the property and if so for how long? Once you have an exit strategy in place, you can ensure that you do all the right things to ensure that your investment provides you with the expected returns.
If you’d like to speak to Robert Oulsnam & Company, you can contact us here. Alternatively, you can call our lettings office on 0121 445 7410.