Getting into property investment
Buying your first investment property is a huge step, but you don’t need to take it on your own. Inside Track’s know-how can help you make the most of your money and it’s vital you carefully consider each decision you take. We’ve outlined a few of the most important factors in making your first property investment a success:
What do you want?
Think about what you want out of your investment and the aspirations you have for the future. Are you looking for a long-term pension plan with a rental property held for years? Or do you intend to make a career of selling on? You’ll need to make decisions at the beginning of your investment that could affect the chances of achieving your personal aims.
Location
It sounds like a cliché, but location is key. Many investors like to stick to an area they know – but these areas don’t always offer the best growth and financial security. Balancing a portfolio across a number of geographical locations is now seen as best practice, even for smaller portfolios. Buying outside of your immediate location increases the need for good information and careful analysis of risks. Inside Track can help you with an established approach to vetting investment opportunities.
New build or Refurbishment
Many investors start out with a property that needs refurbishment but this may not be the most sensible approach for you. Your own time and work should be a consideration in analysing the return on any investment. Labour-intensive investments can slow down the rate at which you can build a portfolio of property. The biggest trend in recent years has been towards new-build off-plan property.
Finance
Once you’ve chosen your property, you’ll have to pay for it. The approach you take will impact the profitability of your investment and, potentially, your longer-term flexibility. To maximise your potential returns it’s essential that you view your finances as a whole. To find out more about how finance can affect your investment see the section on Finance.
Many investors choose to release capital from their home to help finance their property investments. Most importantly, you need to be confident in your investment. A sensible approach to finance should help to minimise risk whilst maximizing the value you can get out of the assets you already own.
Marketing and letting
It is very easy to focus your energy on finding property and raising capital, but early thought needs to go into the target audience for your rental property. Failure to meet market needs in terms of property type, furnishing and contracts can leave you struggling to turn a profit. We discuss this area in depth in Property Management.