Investment in property is a common option for many investors, but time and effort are required when looking for a good investment.
The ideal property will vary depending on the investor, so before you start looking, you need to be clear about your investment strategy.
Once you have done this, there are some features that you should look out for to ensure a property fits your strategy.
1. Location
Unsurprisingly, location is key. General characteristics to look out for include transport links and amenities, such as shopping areas and leisure centres.
Check the local crime rate to make sure you’re not looking for a property in an area where the level of crime is a problem.
If you are looking for a long-term investment property, you could choose a less desirable area that is undergoing redevelopment. Short-term investments should be in areas currently attractive to your target market.
Think about other amenities that are crucial for your target market. If you want to invest in family homes, you will need to think about local schools and parking. Alternatively, young single professionals will want to live near cafes and bars.
2. Condition
This will depend on the kind of project you are prepared to undertake.
You might not be fazed by a big project and have a team of qualified builders on hand. On the other hand, you might only be prepared to undertake cosmetic changes.
Irrespective of what you can handle, there will also be a financial consideration. It’s a good idea to be aware of the most expensive home repairs before committing yourself to a big renovation project, such as:
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Foundation repair
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Structural wall repair
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Roof repair
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Water heater or central heating replacement
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Extensive damp proofing
It’s a good idea to have a full structural survey done before deciding on a purchase. Further information on homebuyer surveys and costs is available on the Money Advice Service website.
3. Price
If you are considering investment in property, you need to think about the return you want on your investment. This will depend on your investment strategy.
If you are interested in buy-to-let, you will need to know the rental potential. You will also need to account for periods of time when your property may be empty.
If you are interested in flipping for profit, it’s often said that you make your money when you buy, so you need to look for a bargain. This could be a property in a good area that is in a poor state of repair, or a property in an area earmarked for redevelopment.
If you have a specific area in mind, check out the local estate agents for the property prices in the area.
4. Layout and size
The desired layout and size will be specific to your target market. Some considerations are quite straightforward. For example, you’ll need a multiple bedroom and bathroom dwelling for a large family, as opposed to a single bedroom apartment for a young professional.
There are other characteristics that are also worth thinking about. For example, it’s not advisable to build decking in a garden for someone who is elderly or disabled, because it can be a slip hazard when wet. In addition, a home for a young family will need to be child friendly.
When planning investment in property, research will be important. Think about your target market. You want to make your investment property as attractive as possible for that market.
Take home
There is a lot to think about when looking for an investment property, but preparation is key. Take your time and be flexible. It’s a good idea to look at many different properties so you get to know the market and/or the specific area you plan to invest in.
