There are so many reasons why property investment is a good business to be in. Long-term financial gain, short-term rental dividends, and control over your own portfolio to name just some of the more desirable benefits. But, doing it right is where the challenge comes in, especially if you are a beginner.
So, where do you start? Here’s a guide on how to be a property investor.
1. Choose your route
Be clear about what type of investor you want to be. Some would argue that investing in a few smaller ventures is more profitable than one larger project, but be sure to look at all the options before diving in. The other thing to consider is whether you are going to stick to one type of property or have several on the books – there are arguments that consider flats and apartments as financially easier to manage than houses when considering buy-to-let opportunities, but this may not be the best option for the area in which you intend to set up.
2. Research your target area
Which brings us to the second point, research. It’s imperative that you have an understanding of the market you are planning to delve into, as it would be with any new business venture. Make sure you know who the rental market is in your area if this your plan and research the types of properties they are looking to rent. In the beginning, you may find it easier to establish your property investment business in your local area as you will have better knowledge of the dos and don’ts. What’s more, don’t discount unfashionable areas – making an investment at the right time in upcoming districts can prove to be an extremely lucrative move further down the line.
3. Match your property
Once you have decided on an area in which you’d like to invest in, be sure to buy appropriately for a potential resale or rental outcome. Find out who is buying in the area if you aim to do up the property and sell it on, but similarly, if it’s a buy-to-let opportunity, make sure you are purchasing a property that will figure positively with potential tenants. It’s a good idea to target an area with a high proportion of young professionals if you intend to rent, as they will be looking for a high-end property and be prepared to part with more of their income to get it.
4. Shop around
Be prepared to shop around to find your perfect property and don’t ever buy on a whim. Remember your intentions with a property and keep an open mind when viewing. You are buying a property as an investment and not for your own personal use.
5. Add value
Do what you can to add value to your property and stay on top of living trends. Open-plan living, an extra bathroom, gardens and patios will all feature highly on the wish list of most buyers and tenants, as will added security features. Remember that people are looking for the most they can get within their budget.
6. Tax efficient
Getting to grips with the legalities of property investment is essential but it’s also one of the ways you can be at your most profitable. Making sure you are a wizard at filing your tax return and making the right claims where you can could be the key to making your millions!
7. Be aware of the pitfalls
As with any business, there are always going to be hurdles and challenges to overcome but knowledge is power. Try and be aware of potential pitfalls before they occur so you can face them head on. Don’t be disheartened if you do make mistakes along the way, it’ll make you a stronger investor in the long run.
8. Choose how you want to manage your portfolio
Once you are up and running, you might want to draft in a property management company to help you manage your existing portfolio which will free you up to look for other opportunities to grow your empire!
Ogilvy and Sneyd provide a bespoke residential property management and lettings service for property investors, buy-to-let investors, and property landlords in Staffordshire and Nottinghamshire. For advice on your portfolio, call our Staffordshire branch on 01538 360245, or our Nottingham branch on 0115 7528399.