Buying a property as an investment is a big decision to make and once you have decided that this is the right investment route to take, you need to start looking for the right property. But where do you start?
Firstly, you need to arrange your finances so that you know how much you are able to spend on a property. Start this process with some free mortgage advice. Once you know how much you will be able to spend, you can start looking for the right property for your investment requirements.
If you’ve been through the property buying process before, you’ll most likely know how difficult and complicated the property hunting process can be and with investment properties, it can be a little more difficult, as you are buying with tenants in mind.
We’ve put together some key points to help you with your investment property search.
Who are you expecting your tenants to be?
This is key! Consider whether you would prefer your ideal tenants to be families with children, younger couples, single occupants or students.
For families, you’ll need to consider the size of the space, number of bedrooms and whether there is outdoor space. Location is also very important and for families, you need to look at areas with good schools and other child-friendly facilities such as parks, libraries and community centres.
If you are targeting singles or younger couples with no children, then you could buy a smaller property within good proximity to public transport. Being close to bars, cafes and restaurants is also a key consideration.
For students, you could consider larger properties with several bedrooms that can be let out individually as well as smaller flats. Location is key for students as they want to be close to their place of study. You’ll likely be looking for a property in cheaper areas when targeting students.
What is the condition of the inside of the property like?
If you are looking for a property that requires no renovation, you need to look at it through your tenant’s eyes and think about what would appeal to them. Does it have great natural lighting and ventilation? Does it have a neutral decor that will appeal to most tastes? Is there a nice view? Do the fixtures and fittings work?
If you are looking for a property to fix up and renovate then you will need to think about how easy the changes will be to make, what permission you require and essentially the costs involved.
What is the outside environment like?
Is there a garden? Consider whether this is a good or bad thing for the type of tenants you have in mind. If there is a garden, will you expect your tenants to maintain it? Is there parking? Also, consider shared facilities such as laundry areas and other shared space (if it is a block of flats).
Can you charge a competitive rental rate?
You’ll need to carry out some research into rental rates in the area and look at similar properties to the one you are considering purchasing, to assess what you can realistically charge for rent. It’s a balance between charging enough rent to be able to cover your mortgage repayments to make your investment worthwhile and charging a competitive rental price to ensure you attract tenants.
Consider the trends in property prices
Knowing how property value trends are tracking in the locations you’re looking (both in the past and the projected value) can also give you a better idea of where to purchase and help determine the areas and property types that offer better returns.
Before you start your investment property search, seek mortgage advice like the easy and free advice offered at Propillo.