Some Tips for Buying an Investment Property
If you are looking for a way to give yourself a nice pension pot, investing in property could be a good option. It is not for everyone, but it is certainly worth considering. With the help of a financial advisor and detailed articles, like the one on this page, you can easily work out if property is the right investment vehicle for you.
Should you decide that it is the next step is to start the buying process. The key to successfully buying a good investment property is research.
Identifying property hotspots
The first step is narrowing down your options. In many countries, anyone can buy property. Therefore, there is the potential for you to invest in property abroad.
Sometimes this is a good idea, other times it can be an unmitigated disaster. If you are interested in doing this, it is extremely important to do additional research. An awful lot of foreign investors have been stung when buying property abroad. Unfortunately, scammers see foreigners as easy marks, so target them with dodgy property schemes. However, there are genuine bargains to be had, and money to be made, so there is no need to dismiss the idea completely.
If you choose to invest in your own country, use the press and property websites to identify property hotspots. You are looking for places where rents are high enough to allow you to generate a yearly yield of at least 8%.
Areas where regeneration schemes have actually started, or that have been identified as Enterprise Zones, and the like, are often good options. In these areas, property prices typically rise quickly, and because there is employment how much you can charge for rent tends to rise too.
Tap into the knowledge of local estate agents
Once you have narrowed down your options, it is always a good idea to tap into the knowledge of property agents who operate in the area you are interested in. Estate Agents in York, and other cities or towns can point you in the right direction, because they know what areas are set to be developed next.
If you can, use a firm that also offers property management services, for this stage of your research. This type of agency knows what tenants are looking for, which means that their advice is more target, and relevant, for those who are looking to buy a rental property.
Once you have identified properties you need to investigate the potential of each one. You need to make sure that each property is legal, and identify any issues that may cost money to rectify.
It is important to work out how much you will have to spend to turn the property into one that complies with all of the relevant regulations. You need to put everything on a spreadsheet, including how much rent you can secure.
Be realistic, and build into your calculations the fact that your property may be empty for part of the year, and that you will have maintenance bills to pay. Also, bear in mind that sometimes tenants will not pay their rent. Using the spreadsheet will allow you to see if you are likely to make or lose money on that particular property.