Now more than ever, plucky newcomers up and down the UK are giving real thought and consideration to investing in properties for the purposes of generating a secondary revenue stream. As monthly rent rates and house prices in general continue their extraordinary acceleration, there has technically never been a better time to get on the property ladder and capitalise on demand. From short-term rental student property investment in Oxford to family home rentals in Scotland, properties in prime locations are being snapped up at record pace.
Nevertheless, property investment as something of a business strategy isn’t for everyone and nor should it be taken for granted as a guaranteed route to success. Quite to the contrary in fact as there is so much to take into account in order to be successful through property investment, experts more often than not find themselves advising their clients against getting into the game.
So in order to determine on exactly which side of the fence you stand, be sure to ask yourself the following questions long before even considering committing to your first property investment:
1 – Can You Really Afford It?
The first and most important question of all is of course that of whether or not you can really afford to invest in property in the first place. What is crucial to remember here is the way in which the price of the property itself constitutes just one of the expenses you will be looking at and is in no way of final estimate. If for example you find a property of interest for £100,000 or so, there’s a pretty strong chance you’ll be looking at paying in excess of £120,000 once all fees, taxes and charges are added into the mix. And of course, there are other expenses to consider in terms of getting the place ready and letting it out.
2 – Do You Have the Time?
There’s a very good reason why most of those who turn a profit by way of property investment tend to do so as something of a full-time job. It may seem like there’s very little to it, but in reality the process of investing in a property in the first place for the purposes of letting it out and all that’s required to get it advertised and successfully let long-term represents a huge commitment of time and effort. Suffice to say that if time is already at a premium in your life, property investment may not necessarily be for you.
3 – Are You Looking Far Enough Ahead?
Be sure to ask yourself whether you are considering property investment simply because it appears to be a good idea right now, or because you have considered things long-term and know it to be something that can and will work for you for the years and decades to come. Suffice to say, diving into things for quick fixes represents a one way ticket to failure.
4 – Do You Know Your Target Market?
In terms of the actual type of property you are looking to invest in, do you know anything about your intended target market or are you just expecting the place to appeal to everybody across the board? One of the most important things to bear in mind when looking to invest in a property for the purposes of letting it out is that of who your target market is, where they are located and the types of properties they are most interested in.
5 – Have You Assessed Demand?
It’s also of paramount importance to invest plenty of time and efforts into fully researching demand in the exact area in which you intend to invest. In most towns and cities across the UK, simply moving 100 metres to a different street can make the difference between a solid gold property in the highest demand and another that you will simply never, ever be able to let out. Ask yourself – how is your local knowledge?
6 – Will You Seek Professional Assistance?
The vast majority of successful landlords currently in business use professional agencies and service providers to take care of things on their behalf. Have you considered the advantages and disadvantages of seeking professional assistance, or do you really think you have the knowledge and talents necessary to make it on your own?
7 – Can You Afford to Fail?
Last but not least, you simply cannot and therefore should not get into any kind of property investment situation under the impression that failure is not an option. Of course if you make all the right decisions along the way, then it is unlikely that things will go wrong, but at the same time you need to ask yourself whether or not you can afford to fail and what will happen if things really do take a very drastic turn for the worse. Or in other words, will you be able to get by if the worst should happen, or are you putting all of your eggs rather dangerously in the same basket?