The simple checklist for property investment success

Checklist for property investment success

A step-by-step guide to property investment

Property investment success can be achieved by anyone. Some of the most successful investors I know have made money in buy-to-let investment from day one. How do they do it? They decide what their objectives are, how hands-on they want to be, and then take a systematic approach to property investment. By taking the same approach, the beginner investor with only a rudimentary knowledge of property investing could make a successful first-time buy-to-let investment.

This simple checklist will help you take a step-by-step approach to investing in property. It will ensure you avoid the mistakes made by unprepared property investors.

Do I know what my investment objectives are?

You can’t start any journey without knowing where you are going. You also need to know where you are starting from. Only by knowing these two reference points will you be able to plan your route. The first thing you need to do is ask yourself what you want your property investment to do for you. What lifestyle do you want to enjoy in the future, and when do you want to enjoy it?

When you are setting your investment objectives, think SMART – make your goals specific, measurable, attainable, realistic, and time-bound.

Do I understand enough about property investment?

Get some investment education before investing. Don’t rely on the help of friends and relatives. Unless they own a profitable property portfolio, they’re unlikely to understand the rules of the property investment game.

Don’t get suckered into attending expensive property investment seminars. All you need to know can be found in the Gladfish Academy – and it’s all free. You can learn at your pace, and search for resources you need as you go.

Remember, too, that you will never know everything there is to know about property investment. So, get the essential education you need to get started, and then invest. As your portfolio grows and your buy-to-let earnings increase, your experience will start to guide you.

Where should I invest, and what type of property should I buy?

There’s a simple rule to follow when buying investment property: always invest with property fundamentals. Our Hotspots Algorithm focuses on 108 data points across 324 UK areas. These data points cover the fundamentals of shops, schools, transport links, major employers and major investment. If all these boxes are ticked, then demand should be strong for property now and in the future. It’s this demand that will underpin your buy-to-let rental income. You’ve identified the best places to invest in property UK.

Having selected where you want to invest, decide what type of property will be most in demand. Speak to local agents, consider area demographics, and even visit the area to see for yourself.

Do I want to be a landlord or property investor?

Now, before you invest, it’s time to ask yourself how much involvement you want with managing the property after you’ve invested. Some investors start their portfolio by being a landlord as well as investing. As their portfolio grows, so too do their landlord responsibilities. The time they spend on managing their properties, chasing rent, finding tenants, dealing with maintenance issues, etc. becomes a full-time job.

If your objectives for investing are to create a more relaxed lifestyle, with time to spend with family and friends, travelling, or doing the things you want to do, you’re unlikely to achieve this as a property landlord. You could as a property investor.

So, decide if you’re going to be a landlord or an investor. If it’s the latter, then my advice would be to begin how you mean to go on. It’s easier to find the best professional investment property management companies when you own one property.

Do the numbers add up?

Okay, by this stage you will have identified your objectives, formed a strategy to achieve them, and found the location and property for investment. Now you need to run the numbers, and figure out if the property investment will stack up in your favour and help you towards your objectives.

A two-year cash flow worksheet will enable you to do this. Consider all your costs and expenses, and write them down. Then consider the rental income you could achieve. Overestimate your costs and underestimate your income. Don’t forget to allow for void periods, where your property is empty between tenants. And include a mortgage interest rate cushion: work out the numbers, allowing for a 1% increase in interest rates.

Have I got enough cash to invest?

If the numbers look good, now you need to look at the finances you have available to invest. You’ll need a sizeable deposit, then invest with a mortgage to reap the benefits of leveraging in property investment.

You should also consider retaining a reserve fund – I’d recommend around the equivalent of three months of costs. It should be enough to sustain your property during void periods and to meet any unexpected maintenance bills.

If you haven’t got the deposit in cash in the bank, consider how else you could raise the cash. Over the last few years, most successful beginner investors have started by releasing equity from their home. The Bank of Mum and Dad is another favourite source of deposit money. Others starting out in property take actions needed to save their first property investment deposit.

Who do I need on board to help me?

Whatever you do, surround yourself with the right people. Invest some time in finding the people you can trust to help you and guide you. A good buy-to-let mortgage broker could save your tens of thousands over the course of a single property investment. An experienced solicitor will help you avoid legal issues that could cost you, dear. An accountant will help you to keep your UK property taxes to a minimum. A property mentor will help you make informed decisions. He or she will help drive your portfolio growth safely, and in line with your objectives. And the best will be able to recommend all the professionals you need.

Take the first step towards your desired lifestyle. Contact one of our team on +44 (0)207 923 6100, and find your property mentor. We’ll be happy to discuss objectives, strategy, and help you buy the investment property to kickstart your property portfolio.

Live with passion

Brett Alegre-Wood

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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