If you’ve just decided to take your first steps into the world of property investment, may I be the first to say congratulations! It’s the first stage in an exciting and hopefully very profitable journey for you. If it’s done properly, investing in property can be a rewarding and profitable business – but that doesn’t mean it’s without pitfalls. Just like every other investment, it requires careful management, and isn’t without some risks. But don’t worry, we don’t leave you in the dark. Today, we want to share some key things to keep in mind when buying your first investment property to ensure it will benefit you, and help you avoid making some common mistakes.
Brush Up On Your Investment Knowledge
If you’re new to the investment game, or you’ve been out of the loop a while, it’s important to get a good understanding of the processes before you dive right in. Take some time to understand the ins and outs of buying a property to let – particularly because the process is different for buy-to-let than it is for standard house buying. Do some of your own research on the market, and speak to a few reputable estate agents in the area for advice. But don’t just speak to the sales team – make sure you speak to the lettings teams too. Since they deal with enquiries and lettings all day, they can give you some valuable insight into what tenants in the area are looking for, what’s popular and what’s expected of you as a landlord. You will also need to crunch some numbers. Investigate rental values and yields, and make sure you discuss all of this with a mortgage advisor, so you can be sure you will actually make a profit. This process will throw up some interesting questions, and help you understand the risks and rewards you can expect from your investment. Honestly, if you only take one thing from this blog, make it this.
Have A Clear Plan
Once you’ve done all of your research, don’t just rush right into buying a place you like. Take a step back and think about how you want to approach this, quite substantial, investment. How much money are you willing to put into a property, and how much return would you like to make? What type of property would you like to own, and who would your ideal tenants be? Are those tenants looking for that type of property, and if they are, how can you position yourself to be attractive to them? Planning out your approach to buying a property will drastically increase your chances of success with the investment.
Get The Right Support And Advice
Don’t do it alone. Buying an investment property is a big step, and you will need some advice at some point. Having knowledgeable parties around you will help you stay on track, avoid pitfalls and make you much more likely to reach your goals. So make sure you have an investment advisor, property manager, estate agent (with sales and lettings capability) and a mortgage advisor to help you when needed. Make sure they know what you want to achieve, and they will help point you in the right direction.
Start With Something Manageable
A lot of first time investors will start out with big ambitions. But we advise you to start out with something small, and work up to the big picture plan. When it comes to managing your first property, it’s all about quality, not quantity. You want to make sure you invest in the right property in the right location, and that you are meeting your goals without sacrificing anything. It might mean you have to wait to build up that dream property portfolio, but in the long run it’s worth starting small, finding your feet and then building on solid foundations and experience.
Be Prepared To Work
Finally, be prepared to put in some hard work. Investing in a property is about more than just buying a house. You will need to do a lot of research and prep work beforehand, and once you’ve bought somewhere, the workload will increase. If you treat your investment as a long-term commitment, you will be able to build up a profitable and sustainable portfolio. So when you start out, don’t overwhelm yourself by taking on a property which required too much extensive work, such as renovations or redecoration, if you know you’re not ready to do the work.
Still up for it? Great! Here at Northwood, we love helping new investors find their perfect buy-to-let property investment. Not only that, but we establish a long-term relationship with you to help guide and support you in your investment journey. This includes helping you find and buy a property, and then finding you tenants to occupy it. And if that wasn’t enough, our guaranteed rent service means that you can start seeing returns from day 1, even if no-one is living in your property! For more information, just get in touch with the Northwood team today.