Before buying an investment property it is a good idea to carry out some research and stick to some basic rules if we look at the most popular way of buying an investment property buy to let then this is a good example to work from
First research the market whilst buy to let is very popular it is not the right choice for all . It may be that you do not have the time to deal with an buy to let property and may look at an alternative . The property market can fall as well as rise try and research what is due to happen in the area is the market to be flooded with property , companies relocating, transport etc
Location Location location this is the second point choosing the right location is essential for a a buy to let property to be a success . For student properties these need to be a short walk from the uni with easy access into the nearest town or city. if you are looking at a modern apartment without parking it is a good idea if it is in a development it is close to excellent transport links. The best property for yields may not be where you live but in another part of the country . if researched and set up properly this can still be an excellent prospect fro those considering buying an investment property
Target your tenant you want, match the property to the area and the type of tenant that you want. look at the demand generators in the area, hospitals, companies, transport links, schools universities and create a good property that will match the needs and desires of the tenant.
Look at the level of your investment, firstly you may be able to negotiate on the purchase price as you are offering the seller a buyer without the inconvenience and challenges of chain behind you . Speed if the seller wants a quick sale without a chain these can easily be accomplished. Any additional capital expenditure required for the property should be taken into account and should also reflect it is a rental property and the target tenant
Funding, buy to let mortgages are not only available through high street bank in deed there are specialists out there and so it may be prudent to speak with an independent broker . Look at the rates and then you can see what fixed or tracker rates are available . At the moment mortgage rates are extremely low so it is important that you allow in your plans for rates to rise. In the short term some of the cost of a mortgage depending on the type taken may be taken into consideration when calculating tax due
This neatly leads to
the point do you have all the facts and figures if you are thinking of buying an investment property?
Research is very important when considering buying an investment property .Two modern flats
may be in a similar area and in theory attract a similar rent. The block and maintenance charges however, may be very different which would affect your yields and in theory value. So it is important to make sure you have all this information take into account the possibility of void periods and perhaps also consider rental insurance in case the tenant does not pay for what ever reason and any costs associated with such a situation. You should also take onto account who will mange the property you / an agent/ or a mixture of the two these will affect costs and therefore yields also. Whether managed by an agent or yourself regular property visits are essential and as a property owner it is good practise to visit your buy to let property once every 6 months
There are now specialist properties being built to maximise rental yields etc which may be ideal for those considering buying an investment property. Investment Property Consults are happy to talk through buying an investment property with existing or potential buy to let landlords.