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5 Steps to Help You Decide on the Perfect Property Investment

By: Olivia Hanlon


keys in hand

Property investment can be daunting, especially when you’re putting into it a large amount of your hard-earned money. There are an endless series of choices to consider, and you must purchase the right property in order to succeed. That’s why so many investors are skeptical about purchasing without the correct research first.

Understandably, you want your money and investment to be safe; it’s only fair that you conduct due diligence before working with a certain company. However, as well as taking precautions, you should also take some steps to help you decide on the perfect property investment that is going to make you the most money and suit your lifestyle too.

Interested in property investment but unsure of what to do next? We’d suggest reading the tips and steps below to get a true picture of your investment before any money is given out, or a reservation is made.

Talk to experts

Experts know their stuff when it comes to property investment and this can be invaluable information for a beginner. While online blogs and websites can help you to research the investment industry, the best way and perhaps first step in your journey will be talking to an expert, either in person or over the phone. RWinvest is a property investment company who have highly-trained property consultants on the phone for anyone who is considering an investment.

Even if you’re simply considering your options, it’s worth speaking to someone about your plans to see if they’re realistic. If you have a budget or a specific amount of money to spend, a property consultant can give a more detailed view of how successful you might be and whether it’s worth it to spend money on a property.

Avoid fixer-uppers

The prospect of fixer-upper properties can seem exciting, especially with the countless number of success stories online. It can be a good idea, and if you don’t know any better, then it can seem like the best property investment option. However, it’s best to stay away from fixer-upper properties as your first investment. You may purchase an affordable property thinking you can spend a few thousand pounds renovating it, but the reality will be very different.

Fixer-uppers could come with a whole host of issues, from plumbing and boilers to flooring and roofing. You never truly know the extent of your issues before you purchase it and have to deal with the consequences. We aren’t saying avoid fixer-uppers altogether, but for your first few properties, it may be best to go for a buy to let opportunity or buy to sell.

Consider budget and rental return

Before investing, you will want to consider your budget and rental return (if you’re opting for a buy to let property). It’s pointless browsing properties you’re never going to be able to afford. Keeping your browsing to a realistic budget will mean you’re not disappointed. Remember the option for a mortgage on any property investment. It’s a great way to extend your reach in terms of budget and perhaps afford a more expensive option if you couldn’t before. Work out your mortgage repayments before agreeing or signing any contracts, though. You still want to be able to have a profit after getting rental payments from tenants and paying your monthly mortgage.

Decide on a location and ideal tenant

Before purchasing a property, decide on a location and ideal tenant for your investment. For example, although the best areas in the UK for property investment are always changing, three cities regularly come out on top in terms of price, demand and return–Liverpool, Manchester and Leeds. Despite what people often think, the London property market is oversaturated and should be avoided if you want to make a large amount of money.

While the demand for London is prominent, the property prices are extortionate and out of budget for many investors. According to Totally Money’s Buy to Let yield map, L1 in Liverpool is the top postcode for buy to let properties to make a good return on your investment.

Have a clear strategy – hands-off vs hands-on investment

Your investment journey can vary depending on the type of strategy you take. Having a clear path mapped out is essential to succeed in the property industry. There are two main strategy types when it comes to buy to let properties. Hands-on investment is when you’re actively involved in the investment process, and you’re responsible for managing tenants, their demands, and acquiring new tenants when others move out. This can work if your property is your full-time job and you have no other commitments, since it can be a long and time-consuming strategy.

Hands-off investment is when you hire an individual or company to manage your buy to let property. This includes acquiring new tenants, solving tenant issues and other day-to-day aspects of having a rental property. This strategy may work for those who are only investing as a second income or someone who can’t find the time to manage the property themselves. When considering a hands-off investment, also make sure to factor in costs for a company or individual that will require a fee to do these duties for you.

Published: February 19, 2020

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