Property is one type of investment that proves to be really popular the world over. One of the great things about investing in this particular type of market is that you can be fairly sure of your returns. After all, the majority of the time, house prices only rise and rise. Of course, here are many factors which can alter that fact. However, for most of the time, you are likely to get back a decent amount. A lot of that is down to knowing when to sell, which we will go into in more detail later. However, it remains the case that investing in property is one of the wisest things you can do with your money. The trick to getting the most out of the experience is knowing all of the ins and outs. The more knowledge you are armed with, the more you are likely to get out of your investment. With that in mind, we have put together this short guide. In this guide, we will be focussing on the main things that you should know if you want to make your investment as worthwhile as possible. Let’s take a look and see what they are.
Research Thoroughly First
When it comes to making any major investments, you need to make sure that you know what you are getting into. This is something that we have covered before on this site, but it is an essential part of the entire process. After all, if you don’t carry out the proper research, it can be all too easy to find yourself in trouble. There are many hidden costs, misunderstood legislations and other difficulties which you need to try and get your head around. Otherwise, you can all too easily find yourself worse off than when you started. When it comes to researching the market, you need to make sure you know how it is set to look for the next few years at least. Forecasts are only accurate up to a point, so you should always take them with a pinch of salt. However, even that is better than not even having the slightest clue. One of the most powerful research methods is also one of the simplest – asking someone who has done it before. If you have a friend who has recently invested in property, then they can probably tell you most of what you need to know. Wherever you get your information from, just make sure that you learn everything you can before handing any money over to anyone.
The Importance Of Location
We all know the old saying about how important location is in real estate. Well, it is such a famous adage for a reason – it happens to have a lot of truth to it. When you are trying to decide on your property, this is the first thing you should think about. You should spend a good deal of time on figuring out the ideal location. This might sound like it is quite a simple process, but actually there is a lot to it. Choosing the right location takes on a huge number of different factors which you need to consider all at once. For example, you probably don’t want to go for anywhere which is too far from where you live. This makes it easier to deal with any problems which might occur when you have tenants. As we shall see later, treating your tenants fairly is an essential part of the process, so this is incredibly important. But location is also about the distance to local amenities and transport links. You should take all of this on board when you are buying, so that you know the exact extent of how good the location of your building is. Either way, this is the first thing you need to think about – it affects what you can expect in returns massively.
Remember All The Costs
One of the main hurdles for most inexperienced investors is that there are so many costs which they had not considered. No matter how many times you hear it, it is likely you will still be surprised at just how much you have to dish out along the way. That’s why it is extremely important that you look into what hidden costs you can expect to pay long before you even begin the process itself. One of the main costs that people forget about is stamp duty. This can be a significant portion of the overall cost, so you definitely want to take it on board. There may also be other taxes which you need to look into, dependant on the area you live in. It is also worth remembering that you might at any time need to carry out repair work. You should make sure you are always able to do that if the problem arises. Otherwise, you might end up with some unhappy tenants. And that can result in a complete lack of income coming in from the property. Work out all potential costs upfront, particularly if you have noticed anything dodgy about the property. If it needs fixing, you will need to pay for it out of your own pocket, so account for that.
Get Help From The Professionals
Very few people are able to take on a project of this magnitude without any help at all. Most people find that they require some assistance at least from their family or friends. This is the bare minimum for the majority of investors, and you should consider asking people you know. However, you should also not forget the importance of getting legitimate professional help. There are a couple of ways of doing things, and you don’t have to get help if you don’t want to. If you are keen to go it alone, then you can always work privately to gain tenants. However, most people find that it is much easier to go through an estate agent. The beauty of using an estate agent is that they do all of the administration for you. It might not sound like much, but those little tasks soon add up to a lot of time and effort. If you would rather be spending that time doing something else, then using an estate agent is probably the way to go for you. You do want to make sure, of course, that you are choosing an agent you feel you can trust. The trick here is to go for estate agents who have long-established experience. That way, you can be sure that you are putting your property into the right hands. Discover Entwistle Green for an example of the kind of estate agent you might want to use.
Maintenance & Management
Too many investors get to the point of handing the keys over to tenants, only to fall into the trap of thinking that their work is done. In fact, nothing could be further from the truth. If you want to be a good landlord, the kind that tenants are glad to have, then your work is never done. You need to make sure that you always take a leading stance when it comes to the maintenance and management of the property. Of course, if you are using an estate agent, most of that will be covered for you. However, ultimately it still comes down to you. If your tenants have any maintenance issues, you need to ensure that you are dealing with them in a prompt manner. Not only is this polite, but in most places it also happens to be law. However, it is not just for the benefit of the tenants that you should do this. It is also for the sake of the property itself. It goes without saying that it is in your best interest to keep the property in as good a condition as possible. Otherwise, you might run into problems further on down the line. In the long run, that will only mean that you will have to pay out more and spend more time fixing it up. It is always better to get it sorted as early as possible and save yourself the hassle.
Choose A Target Tenant
This is something that a lot of people never consider doing, and yet it can be so powerful. When you are in the process of choosing a property, think carefully about your target tenant. If you are not sure about who you target tenant might be, then that is a sign that you need to research it well. To do that, make sure you know the area very well, as this is a large contributing factor in determining the target. Beyond that, it is all about knowing what kind of demographics you are going for. If you are looking for young professional couples, then make sure you know that. That means that you can then tailor the property to the likely tastes of those people. It also means that you can specify, if you want to, what tenants you want to have in your property. Knowing the kind of people you want to have in the property can make the whole process flow a lot more smoothly.