1. Start Small and Be Realistic
There’s no doubt that significant growth is possible within the world of property investment. One of the biggest mistakes newcomers make is overreaching when they first start out. Try to make your first investments as safe as possible. Though there is always risk involved in property investment of any kind, avoid spending a large amount on your first couple of purchases if you can and always consider your budget, plus the state of the property market at the time.
2. Location Matters
Everybody wants property in a prime location but this will always come at a premium, unless you are incredibly lucky. Ideally, first-time investors should choose an area that is beginning to show signs of growth. Those with a little more experience can target more popular areas or postcodes that typically attract a higher price range. Getting the balance right is key. One or two properties in less affluent areas can sometimes be a better investment than buying a higher priced building in a popular location.
3. Take Your Time and Do Your Research
Investment is exciting but it’s essential to make sure you understand as much as possible before committing to anything. From stamp duty to diminishing mortgage relief, there are a lot of financial factors to consider. You should start gathering information and statistics about the area you plan to invest in. You will also need to seriously consider the risks you are taking by buying a property. Buy to let properties can decrease in value due to inconsiderate or poorly behaved tenants and the potentially unpredictable nature of the housing market means that though trends can be predicted, unwelcome surprises can and do happen.
4. Do Everything You Can to Increase the Value of Any Property You Buy
From cosmetic improvements such as interior decoration to more radical changes such as entirely new kitchens, bathrooms or even extensions to the existing building, there are a number of things investors can do to increase the potential value of any property they own. Even small details such as new paintwork or the use of professional cleaning service can make a vast difference to the perceived value of what you have on offer. The key is to ensure that the cost of any improvements you plan to make will be proportional to the potential profit which you could make on the rent or sale of the property.
5. Get As Much Advice as Possible Before You Commit to Anything
Consulting a financial advisor will help you analyse your risk as well as ask advice about how to get the best mortgage rate to suit you. Dedicated property investment companies can also offer specific, detailed advice on how to calculate potential returns on investment, how to set rent prices and tips on managing several properties at once. Specific local knowledge can also be extremely useful, so consulting local estate agents and other investors can be a good tactic when it comes to establishing how much any new properties are really worth.