Look out for these 4 factors before investing in a property
At Copperstones we are determined to provide you with the best advice on how you can wisely invest in a property and realistically count the return on your investment.
Usually, when we are thinking about property investment we are thinking of a steady monthly income after a smart property purchase. However, a property’s marketability may also be affected by maintenance costs, vacancy rates, rental yields in the area and market trends.
Whether you are new to property investment or have invested before, there are always four factors that should influence your final decision.
Here’s a look at the top four things you should consider when evaluating a potential investment property:
The age of a property is the first factor you should take into consideration since it is directly linked to maintenance costs.
An emerging trend in property investment is off-plan or new build investment. If you invest in a new build home, maintenance will be something to consider at least 10 years after the purchase since every new property in the UK comes with a 10-year quality guaranteed.
Off-plan investments comprise of investments made in on-going and under development projects. If you choose to invest in off-plan you will also have the chance to “flip” the property before construction ends and possibly achieve a higher return. Consider this a general rule: The newer the better.
Evaluating the neighbourhood can be tricky because many prospective investors neglect one major part of it: the neighbours. A property is part of a wider community that more or less has an overall distinct character.
If it’s an off-plan or new home investment you can ask the agent for the profile of your future neighbours based on other sales. Development projects also use branding to target buyers. Usually, the most desired locations attract people who care about the community and recognize the mutual interest in keeping the neighbourhood clean, safe and inviting.
Your ROI might seem like an easy task until you reach maintenance cost predictions. Maintenance is not a fixed expense, it can increase unexpectedly and can seriously affect your actual earnings from a property.
If you are about to invest in an older building, try to take all possible maintenance costs into account within the first years of the investment. This will give you an estimate of the money spent on repair fixes. The roof, water damage and exterior paint are a few of these costs you should be able to afford if the construction is old. In any case, proactivity is the best solution to maintenance issues.
Property investment is the safest way to grow your wealth. If you are planning to self-manage your property you should know that it can actually take up a lot of your time.
As a homeowner, you also have several responsibilities towards the tenants that you need to commit to. To take this burden off your shoulders you could consider hiring an expert property management team to smooth the process.
In the end, the best practice to effectively grow your income from a property investment is to hire a property manager to ‘run’ the property for you efficiently. If you need help figuring out the rental yields or you are not sure if you should flip your property, our friendly team here at Copperstones can help you.
Please submit your enquiry and a member of our team will get in touch with you soon.