5 Tips for Property Investment

Money not working hard enough for you? Large sums of money sat in your bank account is the easiest way to potentially losing your money in the battle against inflation. Many in the market are taking to investing in property, a tangible investment which you're in control of, whether it's for some passive income or it's your retirement alternative.

1. Gross yields vs Net yields

New build developments offering yields which seem too good to be true.... they often are. Always ensure you're researching into costs as some time's it's the case of "spending more money to make more". For example new Build flats, you might see an advertised 10% yield but this becomes a very different picture if there's an high cost when it comes to ground rent and service charge which is still payable by the landlord. HMO's can often carry high yields but require more time and costs due to higher mortgage rates, local authority costs and potentially increased management costs. We have a great portfolio assessment tool to help you calculate your yields!

2. Location, Location, Location!

Everyone has a different risk appetite so there's no right or wrong option. If you're comfortable investing your capital into an area you know well, it's definitely a benefit as the fundamental rule of making your money work for you is "Know Your Market".

A massive benefit of owning an investment property near you is it's much easier to maintain and market.

If you don't mind where you purchase property, always do you research, a quick google search gives you a sea of information when it comes to investing. Up-coming areas, high yield cities, student areas etc. Always remember the risk of buying in an area you don't know well and ensure you factor in property maintenance costs and management costs.

3. Investment Strategy

Whether you're buying your first property or you're a serial investor, it's important to ascertain a strategy and have a better idea of what your aspirations are, Property is a long term investment... most of the time. Depending on the individual, some investors carry out refurbishment and development to build their portfolios at a faster rate, this however requires experience, time and a risk appetite. For example, you may require passive income, investing into a standard property in a good state which can be let straight away. Perhaps one with more time and more knowledge could benefit from refurbishing and selling for a faster profit.

If you’re unsure about what’s the best strategy for you, don’t hesitate to speak to one of our advisors.

4. Profit on Purchase

There are few types of investments where you can make money as soon as you invest, property can be one of these things. You can often find under-market value purchases at auction houses and even run-down properties in need of a refurbishment. For example, a seller who needs a quick sale or perhaps even a repossession property, if you’ve got the means to fund a swift purchase, you’ve got the opportunity to make an equitable profit. Always research into your figures and do your market research.

5. Learn to haggle!

Of course offering ridiculous low-ball prices isn’t going to get anyone anywhere but it pays to some research prior to making an offer. Factors such as condition, area and even how long the property has been on the market will help get you the best price possible. Resources such as Zoopla and Mouseprice can give you information on recent property sales in the area; this can give you a much better idea on a realistic but profitable offer to make.