Picking up commercial or residential property in hope of turning a profit is a popular activity in the UK. Home to one of the world’s most attractive real estate sectors, Britain is a magnet for new and established investors from all over the world.
Starting out as a first-time investor can be a daunting prospect. Negotiating the complexities of such a market can be challenging for even the most experienced investors.
When it comes to the basics of property investments for beginners, there are five primary points to be aware of. Or from another perspective, five golden rules for effective property investments with product such as fixed rate bonds, as follows:
1. Ensure Your Objectives Are Defined and Realistic
It is essential to have defined goals for your investment activities to ensure they are realistic; Your goal could be to contribute to your retirement income, to generate a consistent secondary income stream, purchase a second home to be passed on to your children and so on. While considering your immediate and long-term goals, also think carefully about the roadmap via which you will accomplish them.
2. Get to Know the Local Market
Making money with property investments means purchasing properties in locations where people want to live and/or work. This means getting to know as much as possible about your target locality, factoring in things like schools, healthcare, transport links, recreation amenities and so on. Planned development works and improvements should also be factored in, which can have a major impact on property values and on the yields delivered by your property bonds long-term.
3. Compare Properties Already for Rent/Sale
The easiest way to get to grips with any local property market is to extensively research the properties already up for sale or rent in the area. This will give you a good indication of current asking prices for properties for sale, along with how much you can expect to receive in monthly rent payments. While doing so, research historical price increases and/or fluctuations over the course of the past decade or two.
4. Discuss Finance Options with an Experienced Broker
Your current financial circumstances and long-term goals must be carefully assessed, in order to ensure you choose an appropriate funding option for your investment. Examples of which include conventional mortgages, secured homeowner loans, specialist buy-to-let mortgages, bridging finance and more. Your broker will also negotiate on your behalf to find you the best possible deal from a reputable lender, comparing the market in its entirety to save you time and effort.
5. Visit a Selection of Properties in Person
The best way to get to know the market you are targeting with your investment is to explore it in person. Before making any major decisions, arrange to visit a selection of properties for sale in person. This will give you a good indication of the area’s value and appeal, far more information than figures and statistics alone. It will also give you the opportunity to examine the general property market in the area, helping you determine whether there is adequate demand for the type of property you intend to buy.