The simple method for cash flow property discovery
The best places to invest in property UK can hold some incredible positive cash flow opportunities. One downside is that you can spend hours, days, and even weeks conducting the research needed to find them. Of course, if you do make a great property investment all that time and effort will be worth it.
For most people, though, the pace of life and work commitments stop that first step from happening. Ten years further on, property values have rocketed. The investor has lost out on a decade of passive income and wealth-creating capital growth.
In this article, we’ll discuss what factors make a place among the best to invest in property for cash flow. We’ll also show you how you can find the best location with the minimum of effort.
Many investors buy property local to them. They believe that it makes their investment easier to manage. It may be true if the investor wants to become a DIY landlord. However, by investing only locally to you, it’s probable that you’ll pay for ease of management with lower capital growth and a poorer rental yield. The best places to invest in the UK are rarely on your doorstep.
The first step to great cash flow investment in the UK is to think nationally. As I’m writing this, Manchester has jumped to the top of the list of the UK’s city property hotspots. London has fallen behind Liverpool, Birmingham, Portsmouth and Leicester among others.
In London, some boroughs experienced price falls while others saw property prices rocket in 2016. Rental prices move similarly: in some areas, they’re rising, in others, they’re falling.
So, think nationally to find the best cash flow property. Then you can start drilling down into the numbers to find the best locations for cash flow property investment.
Examine local economies
The strength and prospects of a local economy are the next steps to finding great cash flow. Search the websites of local authorities and trade groups to uncover property fundamentals such as retail and entertainment and education establishments. Also, you’ll want to discover:
- Planned and budgeted infrastructure spending
- Major employers, and types of jobs
- Local wages
Look also at crime rates (and types), and consider the local transport infrastructure. A diverse economy is better, with more than one major employer and a forecast of above-average growth.
All these factors add up to create desirability, which translates into lower void periods and higher rents.
Find out who your tenants will be
Now it’s time to examine local demographics and the tenant market more closely. You want to find out who the typical tenants are in the locality. Are they young professionals, couples, or families, for example. Each type of tenant has different needs. Families want more bedrooms, to be near schools, and possibly an enclosed rear garden. Young professionals want to be near entertainment and city business districts – and this is generally in new build apartment blocks.
If you buy an apartment in an area which is mostly populated by families, it may neither be good long-term value nor attract competition from tenants.
Know the rental value of your investment property
Having established that the location is good and the type of property most profitable to let, it’s now time to consider the rent that you could receive. You’ll need to contact local agents, search property listings, and be a little savvy about the process of rent discovery.
Remember, if you approach an agent with rent queries as a buy-to-let landlord, the likelihood is that they will quote you a higher rent than is realistic. If you ask as a tenant, they’ll quote lower. The original price is somewhere in the middle.
Understand your costs
When calculating cash flow, take every potential cost into consideration (and then be conservative). Speak to local tradespeople, property managers, and other service providers to find out what associated costs will be. Take into account other costs such as utilities and council tax (if you have a void period, you’ll have to pay these).
Find the best places to invest in UK property the easy way
Any successful investment is only made after undertaking research. If you don’t take the time and effort to discover the best place to invest, you won’t make the best returns. If you buy an investment property that pays a £100 more in cash flow every month than another, after 20 years, you will have earned £24,000 extra. If only there weren’t so much work needed to discover the best cash flow investment opportunities in the UK!
We understand that people are busy. You’ve got your job, family, friends, and everyday life taking all your time. That’s why we make the process of finding the best places to invest easy. We’ve already done all the hard work. You can access our research for free, and find the best places to invest in property UK in just a few minutes.
And when you’ve uncovered the ideal location from our comprehensive research, contact one of our team on +44 (0)207 923 6100 and we’ll help you find the perfect property for your investment objectives.
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