7 things you must consider before you invest in property

7-things-you-must-consider-before-you-invest-in-property

Perfect planning delivers perfect property performance

Investing in property really can provide the lifestyle you desire. PwC has forecast that 1 in 4 homes in the UK will be in the private rented sector by 2025. With more than a million extra households expected to be renting in 2025 compared to today, the demand for rental property could turn your goals into reality. To realise this potential, you must be prepared. You must plan for successful investment in property. Here are seven things to plan before investing in property.

1.      Where will you invest?

Buy a property in an attractive location for investment, where people want to live. Invest where there are good shops, recreation facilities, and schools. People don’t want to travel far to buy food or go out for an evening meal or drink with friends. Families want to live where their children will receive the best education.

Look also for transport links, which make commuting to work much easier. And, talking about work, invest where there are plenty of work opportunities provided by several major employers – this will help a family to earn a second income.

Finally, invest where there is major investment committed – regeneration and infrastructure spend is key to the longevity of investment potential.

2.      How will you finance your investment?

Consider how much deposit you need to raise, and how to raise it. Perhaps you’ve received a bonus from work, or an inheritance. Maybe you have a large amount of equity in your home. Is that cash in the bank, or sitting idle as home equity, producing the returns that will give you the lifestyle you deserve?

Use your capital as savvy property investors, and access the benefits of leveraging in property investment.

3.      What partners do you need to be successful in property investment?

Choose your investment team wisely. Think about the skills you have and the skills you are short of to ensure profitable investment. For example:

  • Access property investment research
  • Partner with successful property investors
  • Choose the best mortgage brokers
  • Make sure you pick an experienced solicitor in the buy-to-let field

4.      Who will manage your investment property?

Do you really want to manage the property yourself? Are you tough enough to chase late-paying tenants? Do you have a network of maintenance workers to carry out repairs? Are you ready for those midnight calls from tenants complaining about a dripping tap?

Think about your objectives, and if they include being a DIY landlord. If they don’t (and mine never have), then you’ll need to hire a good investment property manager to look after your properties.

5.      Know your target tenant

Who will you rent to? This will make a difference to the type of property you buy, and how you furnish it.

6.      Always consider the ROI

To unlock your lifestyle goals, your investment property must provide a return on investment (ROI). Don’t invest emotionally, when you have fallen in love with a property yourself. You won’t be living in it.

Consider the rental income it could produce, and accurately assess investment property expenses to avoid cash flow problems.

Consider your financial objectives, and whether they will be best served by investing for income or capital growth.

7.      Be prepared for the worst

Nothing worth doing is ever plain sailing all the way. There will be times when your investment property frustrates you. Understand that you will suffer void periods, for example, when between tenancies. Tenants may pay rent late. A water pipe may burst.

If you are prepared for the worst, you’ll breeze through these frustrations. The best way to do so is:

  • Build a reserve fund for emergencies. This will remove the financial stress.
  • Use an investment property manager to take care of the day-to-day duties of being a landlord.

As I wrote at the top of this article, ‘perfect planning delivers perfect property performance’. That’s why we help investors to be perfectly prepared to invest in property.

Kick off your property investment career on the right foot. Contact Gladfish today on +44 207 923 6100, and book your property investment consultation and discover how property could provide the passive income to fuel your lifestyle goals.

Cheers,

Himansu Joshi

About the Author

Brett has over 20 years experience in all facets of property, he owns various companies centred around property and is the driving force behind the education and training at Gladfish. His companies have sold over £850 million in UK and London property and he manages over 1200 properties through his estate agency chain. Today he shares his time between UK, Australia and Singapore. He is married to Arlene and together they have 4 kids.

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