Buying For Investment
v Buying A Home
In these times where interest rates are low, people with money to invest, may look to property as a means of generating a return for their money
Although recent tax and legislative changes have made buying-to-let a less attractive proposition, buying a property for investment may still be worthwhile, provided you buy wisely. Here are five things to think about when it comes to investment properties:
Know your tenants
If you are buying-to-let you need to carefully consider the style and configuration of a property in terms of the type of tenant you’re hoping to attract. In the first instance, you may want to purchase a property based on the category of tenant you want. For example, if you are looking to attract professional working couples, buy in an area with good transport links, places to socialise and good broadband speeds. If you’re looking to attract families, a nice garden, a quiet road and parking will be more attractive.
Stick to your budget
When buying your own home it is easy to exceed your budget when putting in an offer because your personal enjoyment and emotion will come into play. With an investment, you need to identify your budget and stick to it. Although rationally we know that we need to put emotions to one side when buying an investment property, it is easier said than done – especially if you end up in a bidding war! Getting set on a property can end up costing you more than it’s sensible to pay, reducing the rental yield.
The same can be said with renovating a property. A dilapidated property may be a good way to save money, but careful consideration is needed. Being practical will mean you reap the returns of your investment, overspend and you may not benefit!
How involved do you want to be?
If you are new to the investment market, you may want the services of a managing agent. This can be beneficial and ensure the letting and management runs smoothly and laws are complied with. However, it comes at a cost and any spend will impact on your potential yield. If you own a single property or a portfolio it is tempting to manage them yourself to save management fees. However, prepare to invest your own time and be ‘on call’ when there’s an issue.
Do your homework
One thing remains a constant – whether buying for investment or buying a property for yourself – is the importance of getting a survey. When buying for investment, it can be tempting to skip this as a means of saving money. However this approach can end up costing you dearly – especially if it transpires the property has serious structural, damp or disrepair issues. Costly works such as re-roofing, replacement boilers and damp-proof courses are often missed without a surveyor’s report.
If investing in property is a new venture, speak to those who have done it before and learn from their mistakes! Choosing a bad tenant, spending too much, or buying a property with large amounts of unexpected works can all be avoided.
The Chartered Surveyors at Lea Hough can provide professional advice in relation to purchasing a property for any purpose. The team can undertake property surveys and valuations so you can be sure you’re making a sound investment and they also offer property management services.
Lea Hough Chartered Surveyors
Phoenix Business Park
Off Blakewater Road
Blackburn BB1 5RW
01254 260196
www.leahough.co.uk
