With the advent of popular property websites such as the UK based Rightmove, it is possible nowadays for anyone who is considering purchasing an investment property to do so without buying a local property paper or venturing inside an estate agency at all. You can even take a virtual tour of your prospective purchase in some instances thus saving on time and travelling expenses. This will prove an invaluable aid in compiling a shortlist of suitable investment properties in your chosen locality. It is always an advantage however to strike up a good relationship with local estate agents who may be able to give you other vital information about a property you are interested in. If you are made aware that a particular house has been repossessed or there has been a martial break up or that the property has been on the market for some time you will know that you may be able to buy it considerably cheaper than the asking price.
With the Internet at your disposal you can conduct a computerised search so you can gauge the rent levels which certain types of properties are likely to achieve. If you are thinking of buying a run-down property in a reasonable area it will give you some idea as to how much you will need to spend to bring it up to the same standard as a similar one further along the road that has already been fully renovated. For instance I have recently bought a run down three- bed-roomed terraced house for 47,000 GB pounds and there is one in the same street for sale at 92,000 GB pounds, which is in top notch condition. So I know that even if the dilapidated house costs me an absolute fortune to bring up to the required standard for letting, I’m still going to be in pocket. These principles can also apply to foreign properties and can give you a reasonable prediction as to whether the purchase will be viable or not.
Another valuable resource to the budding landlord or property developer is to be able to find out at the touch of a button what similar houses have sold for in the past. This can help you to make the best overall decision once you have all the relevant facts at your disposal. Browsing on the internet on a daily basis will keep you informed of current trends and changes in legislation which will no doubt prove fruitful as there is a wealth of information available highlighting the highs and lows of property investment. As with any other type of investment the value can sometimes go down as well as up and it is always prudent to think in the long term. Don’t expect your investment to double overnight; once every seven years is about average.
In order for your investment property to appeal to the rental market it should ideally be close to transport links, good local schools and shopping centres. Parks and open spaces are also something to bear in mind. Your goal should always be to make your property the best available of its kind in your chosen locality and then you will not fail to make it an attractive place to rent and tenants will be more likely to stay longer once their initial agreement has ended.
If you know a reputable builder it would be wise to asked him to accompany you on your viewings. He will be able to point out the hidden costs you have perhaps overlooked and he will also give you an idea of how long any defects would take to put right. Bear in mind that you have to start paying back your loan about a month after the building society have released the capital and if you haven’t moved a tenant in by that time because of work still in progress you will still have meet the payment yourself.
I would always go for properties at the lower end of the market purely because these are the most popular to rent and you will proportionally achieve more rent from two tiny terraces than you would for a larger house even after taking other costs into consideration. Many new investors are initially put off the thought of buying terraced houses because the repairs and maintenance can be proportionally higher than new build but many new developments are ridiculously overpriced to begin with and therefore do not always increase in value as rapidly as you would expect , leaving little hope of refinancing for quite some time.
Do your homework first and then mistakes will be less likely and easier to rectify. Several contingency plans are also handy to have. The figures should always add up in any buy to let purchase so the advice of a reputable financial adviser is invaluable. Cost everything as much as possible beforehand but be warned as even if things go according to plan costs are still likely to escalate. But it’s better to spend more initially than have recurring problems once the property is let. Certain things will always come back with a vengeance if not addressed straightaway; these include damp, faulty roofs, guttering and plumbing.
Safety issues must always be paramount in your mind when it comes to buying a property to let. The electrical and central heating systems must be safe in order to comply with current regulations so these installations will need to be checked and maintained on a regular basis. If the property you are thinking of buying requires a complete rewire and a new boiler this could easily add another 5000 GB pounds to your initial costs. The most sensible thing to do is create a database of your projected costs starting with the most expensive, not forgetting essential fees such as legal costs, insurance and fees incurred in raising finance.
House hunting for the buy-to-let entrepreneur has never been easier but personally I would never buy I house I would not be prepared to live in myself – there has to be some sort of appeal to the place even if the figures stack up. It is invariably better to buy a bad house in a good area than a good house in a bad area as you can always bring the cosmetically distressed property up to the required standard but can do little to change its surroundings. The main thing to bear in mind with being a property investor is to be flexible and be prepared to change your strategies if a project is clearly not going the way you imagined.