Investment in property: 9 key tips

Make the smart choice when investing in property

If you are considering investment in property and you have decided that you want to buy to let  a residential property, then you should keep a few things in mind.

Purchasing an investment property is something that doesn’t come without risk, yet with a few key points to guide you on your way, you can improve your chances of buying profitably.

Below are nine tips to help you make key decisions on investment in property.

1. Location

If  you have rented a home at least once in your life you will appreciate the importance of location. Quite simply, properties located in the more central areas cost more  to rent.  You will need to do some research before you buy a property, in order to establish the ‘quality’ of the area.

If you find a situation where you can buy a ‘cheap property’ that is not located in prime area, you should think twice. There is no value in owning a nice property in an area few people ever want to consider for their home.

2. Rental history

Before you buy a property you should check out the rental history on it. This will tell you the amount of rent former landlords have charged and  give you an idea of the profit potential of your prospective investment property.

In addition, check the amount of time that the property was rented for – importantly, be on the lookout for high tenant turnover. In the majority of cases this will indicate there is a problem with either the location, or the property itself.

3. Amount of listings in the area

Walking through the area where you intend to buy your new investment property, or perhaps just checking the internet will give you a view of the number of rental properties that are listed locally. See how quickly properties turn from ‘available’ to ‘let’ and you will have a good idea of demand.

4. Schools

Family tenants will initially take a look at the schools that can be found close to your investment property. This is one of the main reasons why they would want to rent a home in that area.

Before you buy an investment property check the available schools in  the area and their performance standards. The higher the local schools are classified, the more likely it is people will want to rent your property.

5. Proximity to amenities

Most people who want to rent will be interested in local the proximity of amenities. Having a property that’s near to the supermarket, to a big shopping centre, a cinema, bank, post office and so on will grant you higher chances of finding tenants for it. There are also many individuals who will want to have access to leisure facilities like gyms, swimming pools, and clubs , so be sure you take these into consideration as well.

6. Crime

Look for a low crime area – statistics are available on line. If the area you are targeting is known for crime, few will want to rent there and the rent you can expect will be very low.

7. Job opportunities

People want properties convenient for their workplace. Many will want to relocate nearer to their workplace, as commuting not only takes time, but also costs money and stress.

Choose an investment property that is easily commutable to the town centre, or major employers such as hospitals and colleges, but far enough away so that people will not have to deal with problems like pollution or a crowded traffic.

8. Size of the property

This is a major consideration. When people look for a place to rent, one of the main factors that will attract them is the space of the property. If your investment property is good for young families with at least two bedrooms, you have an advantage.

A property with two bedrooms and two bathrooms is a suitable investment for those seeking young Professionals who are likely to share.

9. Age of the property

When you buy an investment property consider one that is not older than ten years. This will exempt you from many dangers and costs when it comes to building maintenance. You will be the one having to fix the problems for the tenant, so a good choice will keep your costs down.

Investing in property summary

Putting yourself in your tenant’s shoes is the best way to judge the right property for you. Personal taste is irrelevant – this is a business transaction.

Whatever you decide – we wish you well. If you require a mortgage for an investment property – contact us now.

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