Investing in UK property can be daunting, especially for a first-time investor. Following our buy to let checklist or talking to one of our experienced investment consultants can alleviate some of your concerns and provide advice to help match you with an investment opportunity.
Before you start looking at buy-to-let properties, learn about the property market. You need to assess the risk and reward and make sure you are comfortable with the market before investing. This could be researching average property prices, analysing whether they are increasing or decreasing, and reading up on the latest property and political news to ensure no policies are being implemented that could negatively impact profits that can be achieved.
2. Research the area
Some cities in the UK can prove more lucrative than others. This also depends on the type of property you are looking to buy and whether you want to achieve good rental yields or capital growth. You need to make sure that there is a strong rental demand in the city you are investing in, otherwise you run the risk of your property sitting empty and losing you money. Cities such as Nottingham and Glasgow have a high young population, who would typically rent rather than buy if they are starting out in their careers. This means that there is high competition for rental property, which in turn can lead to good rental yields.
Many investors can fall into the trap of having a narrow field of vision, and only concentrate on their own immediate area. There are many pockets of the UK that can offer good investment opportunities, it is just up to the investor to consider them. Our article on where the best places to invest in property in 2018 explains in more detail.
3. Research the type of property you want to invest in
You may want to invest in a nice 3-bed Victorian terrace house, but then release it requires a lot of maintenance work to bring it up to a good rentable standard that will cost lots of money and eat into your profits. Also, if you choose a house, you may be responsible for finding tenants, and must be on-call to address any of their questions or problems.
Whilst these sorts of houses are innately charming, investors can be deterred by the constant upkeep and renovations. Many now opt for new builds or houses that have been refurbished by an experienced developer. The benefit of these types of investments is that being new, fixtures and fittings are likely to be in good working order. Also, blocks of flats are usually managed by an external company, which means investors do not have to spend their time sourcing new tenants and answering queries.
The decision lies with the investor and what sort of property they think will fulfil their investment needs, and how much money and time they can dedicate to it.
4. Make sure that the property meets your investment objectives.
Investing in property is a big decision and property is a fairly illiquid asset, so it is important to write down your medium term objectives to ensure that the property meets your requirements. The beginning of an investment journey is often a challenging one; people often don’t know where to turn.
“Here at One Touch Property we pride ourselves on our consultative approach.” Says investment director Arran Kerkvliet. “One can book a free consultation with an experienced property professional who has at least five years property experience. We will guide you through the process without complicated jargon and will match your objectives with the appropriate investment.”
We have a full range of high yielding properties in the best areas for capital growth thereby offering investors the full choice without any pressure.
5. What sort of tenant do you want to reside in the property?
Different tenants have different priorities and requirements when it comes to rental property and if you misjudge the area and the type of tenant you wish to occupy the property, you could find there will be a lack of demand that could affect your rental yields. Buying a house next to a nightclub in a student area, which you have furnished with expensive appliances to attract a businessperson, would send a mixed message and not attract the desired clientele, for example.
6. Ensure everything adds up, and that you have the appropriate funds
Whilst student property and retirement home investments are often acquired as cash purchases, there is the possibility of getting a mortgage on a buy to let investment. However, most lenders would require a deposit of 25% or more, and an extra 3% stamp duty charge will apply (first time buyers and commercial property up to £150,000 are exempt from stamp duty charges).
Ensure that you have enough funds to afford the deposit, legal fees and any repairs that the property may require. Also ensure that after mortgage repayments, management and upkeep expenses, the rental income you receive is enough to cover the costs and bring in some extra pennies.
Even with our buy to let checklist above, investing in property for the first time can be overwhelming. Individuals should never be afraid to ask for help when it is needed. At One Touch Property, we pride ourselves on sourcing the best quality buy to let property investments and performing due diligence on each investment opportunity to ensure it stands up to scrutiny. Our investment consultants have over 8 years’ experience in the industry, and we acquire many of our clients through referrals from existing customers – something we are proud of as we feel it demonstrates their satisfaction.
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