5 Key Factors to Consider for Property Investors
Before making an investment into property, there are some important features of the market you should consider. Here is 7 key factors to consider if you are on the fence about becoming involved with financial investments within the property market.
The type of property to invest into
The first consideration is what type of property you want to invest into. This will depend on how much money you want to invest, the investment return you want on the property, and when you require the finance back from the investment into the property. There are many different types of property investment, such as: Buy to Let, which is the purchasing of a property or a new build home with the view to leasing to an individual family or large group. There is housing of multiple occupation, known mostly as HMO, this is where the property is multi let to a group of people paying separately. There are commercial lets, whereby you let property for commercial use to a company e.g. a high street shop. Finally there is land development, this is where you can buy or sell land that’s undeveloped, purely for use in property development or development schemes. These different property investment strategies have benefits and drawbacks, depending on where you live and the depending on the investment opportunities available to you. Location of the property
Another consideration is the location of the property. This depends on the geographical location, but also the location of where you are in the country. For example, a property will sell differently if it’s located in a town centre to if it’s in the suburbs, the very well used adage ‘location, location, location’ is definitely true. Location is still one of the most important factors in selling whatever type of property it is that you are trying to sell (Buy to Let, HMO, Etc). A well maintained terrace located on a loud, busy main road will be harder to sell than the exact same house if it was on a quiet residential street. However, the opposite is true for commercial lettings as a shop located on the high street does much better than one in a quiet area of a town or city. Another feature of location is that the rents are higher, and the property more expensive in large cities, and especially capital cities (like London and Edinburgh), something to consider when making a property investment.
Keeping an eye on the property market
The property market, like any market, can be turbulent and can change. This is something that’s true with any investment; it can go up as well as down. Though property is one of the safest forms of investments, especially compared to other contemporary investment strategies, you still need to make sure that you buy the right properties and know when to sell them and how much for. This means a good property investor is consistently staying up to date with a range of factors. These factors include the new housing construction projects around the local area, the house prices in the local area, the general mortgage rates, the property inventory of the local area, and even the rate of ‘property flipping’ in the local area.
Make sure that you have a stable financial position before investing
Investment in property is still an investment, though the rewards are a very favourable margin of investment strategy, you still need capital available to make the initial investment and may need some for a buffer (depending on various factors). If you aren’t sure that you have the money needed for investment in property, then speak to someone in the investment market before you start applying for mortgages and ending up severely in the red.
Make sure you’ve planned for how involved you can be with the property investment Many investors have different levels of involvement with their investment, some of them will find themselves unaware at how much or how little effort and time they need to secure the returns that they want to secure. Make sure you are aware around how active the investment you are making is because, as mentioned previously, there are many different investment strategies for you to make.
These key factors for property investors can help you start your journey into property investment. If you need advice or help profiling and selecting the right property for your investment, we can help you with great business opportunities for any potential investors. Whether you’re a first-time buyer, wanting to build your portfolio or looking for a secure way to invest we can help.