Property investment is one of the most important assets of the UK economy, bringing in billions worth of investments each year. If you’ve found yourself considering making your first property investment venture, make sure you read these tips before going forward.
Research the best areas
If you’re investing in property in the UK, you might feel a bit overwhelmed with the wide choice of cities all claiming to have the best rental yields. Be sure to spend some time doing research to find the areas that will best benefit your investment. Northern cities like Liverpool and Manchester have made a name for themselves as some of the UK’s property investment hotspots for 2018. A number of factors contribute to the success of investment in these cities, including growing populations, demand for quality property, and increasing capital growth. The Northern Powerhouse has received a total of £8.9 million worth of investments into building new housing in the key cities of the North.
Think like your tenant
One of the best strategies before investing in buy to let is to try and get into the mind frame of your target customer. If you’re interested in investing in properties for students, for instance, think about what a student might want from their accommodation, such as being close to their campus and the city centre. Alternatively, if you want to rent to families, you should try and find a property in an area with a sense of community, and that’s in the proximity of local schools. Students, in particular, are a type of tenant with changing views and expectations when it comes to property. Today’s students favour accommodation with more of a luxury quality, choosing spacious city centre apartments over cramped shared student housing. Researching the changing demands of each type of tenant is key towards investing in the right type of property.
Decide what type of property to invest in
Deciding between off plan, new builds or period properties is another factor to think about, with advantages and disadvantages to each. Those who prefer a property with a bit of history behind it might like to invest in period properties, but this isn’t always the best option for energy efficiency and maintenance costs, with new build properties said to save around £624 a year on energy bills. Off plan properties are a property type with lots of benefits such as low prices, strong capital growth potential, and popularity with tenants, but aren’t ideal for investors looking to invest in a property that’s already completed. All in all, new builds such as those available with RW Invest are most likely a safe bet for first-time investors, as they don’t require any repairs or redecoration before a tenancy begins and are often based in popular city centre locations.
Think about finances
Any type of investment is essentially all about finances, and how much money can be made from your venture. Before settling on your first property investment opportunity, work out essential elements such as potential rental yields, the amount of tax you’re likely to pay, and whether or not you should opt for a buy to let mortgage to help the financial process go more smoothly.
To learn more about finances from the My Zeo Blog, click here.