If you’re lucky enough to have come into some money, it can be hard to figure out just what to do with it. Some choose to invest in stocks and shares while others simply keep it in the bank and watch the interest grow.
With the property market slowly recovering, however, there’s never been a better time to invest in this area. Jump on the wagon while prices are still relatively low and watch them soar.
When you have no experience in this field, though, it can be a daunting prospect. There is a lot of conflicting advice available on the internet. We came up with the three things you absolutely need to look at to guide you through the process.
Understanding The Market
Like any investment, property comes with no guarantees. There are potential risks but potential rewards. It’s important to get to grips with the market for this very reason. In order to avoid the pitfalls of investment, thorough research is required.
Buy to let schemes are becoming increasingly popular. Not only are you counting on your property’s value increasing with time, but you are also receiving a guaranteed income.
Finding The Best Property
There are a number of things to consider when choosing which property to invest in. First of all, it’s crucial to choose a popular area. It’s no good buying a home if it’s in a location that people don’t want to live in.
Obviously, you are strictly working within some pretty set parameters. You can only buy what your deposit dictates you can afford. Shop around and make use of a surveyor; that’s what they are there for. Make sure the rent you will receive does more than just cover the mortgage repayments. 125% is a nice ballpark figure to aim for. Try to pay off your mortgage as quickly as possible to minimize the amount of interest you’ll have to pay.
Remember to take into account the costs of any renovation work. You don’t want to be saddled with a house that needs significant improvement that you can not afford. Consider visiting a property investment show as they will usually help you devise a strategy in these instances. Try to dodge the use of agents and brokers, as this will involve an additional payout that can easily be avoided.
You want to get maximum value for your investment, right? The asking prices of properties are, more often than not, inflated to account for negotiations. Sellers know that they are going to be inundated with buyers trying to haggle on price.
If you don’t force them to compromise on price, you’re essentially throwing money down the drain. Money that could otherwise be spent on the property to increase its value.
Usually, as a landlord, you are legally obliged to ensure the maintenance of the property for your tenants. This means having a reserve of cash to cover for any situation that may arise. Understanding the risks and having plans in place is all you really need in order to invest wisely.