A Guide to Choosing the Right Property Investment
Finding the right property investment for you is a tricky task and can take a long time.
Ensuring you are putting your money in the right place is vital, as making a bad investment will waste both your time and funds, leaving you at a serious loss. Property investment comes with a high price tag, so making the right choice is essential.
With that in mind, we’ve used our expert knowledge to put together this blog, to give you the information you need to help you with choosing an investment property.
1. Understand What You Want from Property Investment
Before you make any major decisions on where you want to invest your money, you must understand why you are investing and have concrete goals that you are working towards.
Are you investing to make the most of capital appreciation or are you focused more on rental income?
Do you want to establish a portfolio of properties or focus on owning just one or two?
How long do you want to be investing for? Do you see property investment as something you can do for decades, or just a few years?
By asking yourself these kinds of questions, you can get a better sense of what you want from property investment, which will help you with choosing an investment property.
2. Find the Right Area
No two investment properties are the same, and one of the biggest factors that will affect how big of a return you make is the area that the property is in.
Property markets fluctuate from city to city in a variety of ways. Even different postcodes in the same city can cause a property to change in value, so researching areas you want to invest in is important.
When searching for the right area to help with choosing a property investment, you should focus on these criteria:
- House prices – Try to look for affordable prices that have risen in value over time, so you can benefit from capital appreciation. The Land Registry is a great tool for this, as their data tracks regions, counties and cities by their average house price over time.
- Rental Income – Try to find the average rents for the area you are researching, as this can give you a good indication of what rental income you will make.
- Career Opportunities – Finding out what companies are in the area is an important aspect as this will help inform what kind of tenants you can expect.
- Amenities and Local Landmarks – Finding out what kind of shops, restaurants, schools and cultural landmarks are in the area are also important, as tenants will want to be close to busy areas for convenience.
- Transport Links – Finding out what train stations, bus stops, major roads and cycle lanes are in the area is important, as areas that are well-connected are more popular.
City centres tend to have a great combination of these factors, making them ideal locations for property investment.
Depending on your target tenants, there will be other factors to consider. If you are investing in student property, for example, you should research how close the property is to university facilities, and what nightlife options are available in the area.
3. What Features Does the Property Have?
As we’ve already said, no two properties are the same, so when deciding how to choose an investment property, finding out as much as possible about the property itself is important.
Some things you should look out for and make sure you know are:
- What type of property is it?
- The size of the property – how many bedrooms does it have, what are the dimensions, how many bathrooms are there?
- The condition of the property – is it a new-build or an older property? Are there any repairs needed?
- The floor the property is on – in blocks of flats, units on higher levels have better views, so these can come with higher prices and also more rent.
- Any projected rental yields that the property has.
- Car parking/cycle storage.
- Amenities such as a reception, a gym, laundrette, common rooms/lounges.
- If the property is fully completed or if construction still needs to be done.
- Does it have Serviced facilities available – A good example of a property developer that provides these is RWinvest, a UK based Off Plan property specialist.
These factors will not only affect the price of the property, but also the kind of rent you can charge. This is important information for investors to know, as it gives you a much clearer picture of what your money will be going towards. Why not read our Property Investment guide for some inspiration.
If you know who developed the property, try researching other projects of theirs to get a clearer picture of how trustworthy they are, and what kind of quality you can expect from the finished product.
Visit the property yourself to see it in person, and if this is not available, get as much information as you can, such as floor plans or virtual tours.
By following these tips, you will have a better understanding of how to choose an investment property.
Choosing a property investment is a difficult task and can have dire consequences if you get it wrong.
No matter what you do, ensure you do as much research as possible for you to feel comfortable. It is better to do too much research than not enough when it comes to choosing the right property investment, if only to give you peace of mind.