Investment Properties - When and Where to Buy
|Author: Craig Bees||Published: 3rd April 2018 11:46|
Do your research
Keeping an eye on house prices, as well as average rents, in the areas you’re interested in will stand you in good stead for understanding local market conditions.
There are several ways Bartram & Co can help you to stay up to date on house prices and rents, depending on how regularly you want to be updated and how specific your requirements are.
TOP TIP: speak to any friends or family that have recently gone through the process themselves. They can advise you and may also be able to recommend lenders and solicitors.
Where to buy?
When thinking about where to buy an investment property, always consider how your desired area would rank against each of the following factors before you make a decision as to whether this is the right location to invest in.
- what type of tenant would be most suitable for this area? (eg families, students, professionals)
- given your budget, how affordable is this area?
- what’s the area’s reputation like and is crime a problem?
- how familiar are you with the area?
- what kind of job opportunities are nearby?
- are there good transport links and, if not, is that important?
- what’s the level of essential services - GPs, hospitals, schools - like?
- are there nearby shops and leisure facilities?
- any planned housing/infrastructure projects that may have a future impact on house prices and rents?
What to buy?
By now you know your budget and the area you would like to buy in - but what kind of property is best? Chances are, if you already know the budget and area that you’re interested in, this will automatically narrow your property options. However, in the instance that you still have many options available, think about the following factors to help you refine your criteria.
This list is by no means exclusive but it should provide you with enough information to make an informed decision.
Key factors to think about when choosing a property type:
- what type of tenant would be most suitable for this area - families, students, professionals?
- what is the estimated yield on the property and is this in line with your expectations?
- does any work need to be carried out on the property before you can rent it out and/or is there any required ongoing upkeep?
- is the property freehold or leasehold? If the latter, how many years are left on the lease and how much will it cost to renew?
- are there any service charges or costs that you will need to contribute towards?
- what is the sales history of the property and when was it last on the market?
- how energy efficient is the property and does it need improvements?
Rental income or capital growth?
Properties in certain areas will offer larger yields whereas in others the yield might not be as high but the potential for values to rise is better. What timescales are you looking at - a 30-year investment to supplement your retirement or instant rental income?
What type of property do you want?
Some properties are in need or renovation or refurbishment and can offer the potential to add value if you are willing to do the work but the costs of this work need to be taken into consideration. Think also about whether you would be doing the work yourself or if you need to find a builder?
Bartram & Co will be able to advise on this as well as the types of property sold at auction, so it might be worth checking out what is coming up.
But if refurbishment isn’t for you or you don’t have the time, you may consider investing in a new build property. These can be ready to rent out, come with a 10-year warranty and generally low maintenance. There are also opportunities to buy off-plan with the potential to see capital growth in developing areas.
What type of tenants do you want?
Good to be clear on what market you are aiming for. Some people focus on renting out property near universities to students whilst others are looking for young professionals or families. Alternatively, you may be looking to rent out your holiday home in a popular destination.
All these factors will influence the type of property that is suitable and the returns you make. Again, an agent will be able to help with advice on the types of property that are in demand from each group.
Expanding your portfolio
If you’re contemplating buying a second property and expanding your portfolio, make sure you bear in mind the added complexities that will come with this.
- your ability to secure financing for a second buy-to-let property
- market conditions and the impact any changes to legislation (eg stamp duty, interest rates) might have on your finances and holdings
- would you benefit from using an agent to assist with the managing of your properties? If you are time poor, this may be a worthwhile exercise, especially as your portfolio grows, and will help to alleviate the day-to-day running of your properties
- would you benefit from instructing an accountant or lawyer to assist you with the added complexities that come with a larger portfolio? Though these are added expenses, they may save you time and worry
As with any property purchase, always speak to a financial advisor before making any final decisions.
As your portfolio grows and you find yourself letting several properties, we recommend you speak to our property manager Vanessa Marriott who can advise on all of the complexities.
Bloor Homes South Midlands: don’t forget the release of the first homes for sale at Redhouse Farm on the Towcester Grange development at London Road – a range of 2, 3 and 4 bedroom homes starting from £312,500 for a three bedroom design.
Monthly draw: your chance to win a case of Italian wines (red/whites/mixed) or one month’s membership to Whittlebury Hall Leisure Club.
How To Enter: Every valuation and instruction for sale or rental between now and Thursday April 26 will be entered into the draw, the winners being notified by e-mail.
So if you’re thinking of selling or letting your property and want to win one of these great prizes on offer call (01327) 359164 and speak to our sales or lettings team.
Towcester Property News: April issue out soon, don’t miss out on your copy.
Until next time.
Craig Bees, MD Bartram & Co
E-mail me at email@example.com
Visit our website www.bartramandco.co.uk
and follow us on Twitter@bartramandcotow
Tel: (01327) 359164 Fax: (01327) 359166