Buying and selling property is one of the oldest tricks in the book for investors. If you’re keen to try your hand at investing, and you’re on the hunt for your first property, this guide is packed with helpful tips.
Choosing the right location
Location is critical for aspiring investors. For most buyers, the location of a property is the most important consideration when searching for a new home. As an investor, it’s essential to purchase in an area where there is a demand for the type of property you’re planning to buy and potential to make money. If you are buying to let, for example, look for areas where the rental market is strong and the demand is rising. If you’re hoping to sell within a relatively short period, research markets and see where the demand is increasing and prices are going up.
If you can’t afford to buy in established neighbourhoods where prices are consistently high and properties get snapped up rapidly, focus on up-and-coming areas. Positive signs to look out for include regeneration projects, new infrastructure and transport links, new businesses, such as shops and restaurants, and housing developments. The location should be relevant to the target buyer or tenant you have in mind.
Finding an investment property
The golden rule of successful investment is making money. Every house or flat has value but there is a risk of paying too much or buying real estate that won’t sell or appeal to buyers. When you’ve decided on a location, start browsing listings and carry out research to see what buyers or tenants want. Set a budget and analyse prices. Keep an eye on property news and financial newspapers and blogs and learn more about how the market works and what impacts prices. Focus your search on properties that will appeal to your ideal buyer or tenant. Contact estate agents and companies that specialise in property investment, organise viewings and get to grips with the figures. Research recent sales prices in the street, town or city and see how long houses are on the market. If you plan to rent the property out, get some quotes to calculate potential yields. Always concentrate on your finances. When you’re investing, you don’t need an emotional connection like you do when hunting for a home.
It’s critical to make the right decision when investing in property. If you have a short list, arrange second viewings, compare data sets and consider the timing. When you buy and sell can influence house prices and time frames between going on the market and exchanging contracts. Ideally, you want to sell when prices are high and the demand is causing properties to sell within days rather than weeks or months.
Buying and selling properties can be hugely lucrative but success is by no means guaranteed. To make money, you have to consider the location, the type of property and the market conditions. Research local markets, learn about what impacts prices and levels of demand and define an ideal buyer or tenant to narrow down your search. Take your time to compare properties and analyse data before you make a final decision.
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