Your guide to becoming an investor in the UK property market
Are you thinking about purchasing a piece of investment property? Needless to say, investing in property is a huge step to take. Having the right guidance and advice to make the most of your money is absolutely essential. As a well-experienced letting agent in Cheshire and the surrounding areas, the Jordan & Halstead team are perfectly-positioned to help you make the right decisions.
An investment to secure your future
Whether you are planning on purchasing property to let or to live in yourself, buying and developing a property is a big investment to make. It’s an incredibly exciting step to take, but it can be an intimidating one too! There are a lot of hoops to jump through and a lot of paperwork to get your head around – fortunately, Jordan & Halstead are here to help.
In this guide to buying investment property, we will answer some of your most asked questions, provide some tips and give you a clearer picture of what to expect when jumping into the property market. It can be an overwhelming experience, so let us take some of the weight off your back.
What are the benefits of purchasing investment property?
Some of the main reasons that people choose to invest in property include the fact that you have the freedom to choose your own investment. Then, you get to actually visit, assess and feel your investment, giving a greater sense of control over the process.
On top of this, of course, is the fact that – when done well – property investment can yield excellent returns and can be a very profitable investment. Of course, this isn’t always easy – that’s why securing professional assistance and advice is so important when investing in the property market.
What do I need to do before investing in property?
The first thing we ask anyone to do before taking the plunge and buying new property is to do (a lot!) of research. Take some time to be sure of the clients you want to let or sell too, before looking closely at location and whether your location will attract the clients you’re looking for. Remember that economics drive investment value, so doing your research is crucial.
Next, start thinking about calculating your expenses and profits ahead of time. There’s no harm in getting ahead, and calculating the money you have at your disposal against an estimate for the price or rent of the property will help give you a bit of peace of mind before making an investment.
How much money do I need to start investing?
This is sort of a ‘how long is a piece of string’ type question! This is entirely dependent on what you want to get out of the property marketing and the kinds of investment you are hoping to make. Generally speaking, however, you can begin to invest in property with funds of a few thousand pounds or more.
Keep an eye of the extra costs
Investing in a property might seem as straightforward as calculating your investment costs against your profit, but the truth is that there are a lot of extra costs you’ll need to plan for, including:
Property valuation costs
Stamp duty (England) or Land Transaction Tax (Wales)
Mortgage broker fees
Choosing where you want to invest
Choosing the right location is a huge step in becoming an investor in property. Location will change the average cost of potential properties, the average yield you can expect from tenants, the potential tenants (for example families, students, etc), and the direction of the local property market. Not to mention the fact that some investors will want to reduce risks by investing in a property project close to their own home.
As we have said above, in depth research is a crucial part of this entire process. It helps to have local property experts by your side too, which is why the Jordan & Halstead team is here to offer our knowledge on local property prices. We live and work in the Cheshire area and our team are all local experts. And once you have decided on a location, it will be time to look for potential properties to invest in. But reaching this point is often more difficult than expected.
Not only must you choose a region, but then you need to choose a town to invest in – and even a specific neighbourhood if you want to narrow down your search for properties that meet your needs. Get in touch with Jordan & Halstead today to find out how we can help you search for investment properties.
Buy-to-let investment or buy-to-sell investment properties
Many investors in property in the UK choose to invest in resident properties rather than commercial properties with the intention of then letting the property out to a tenant. Choosing to become a landlord is one of many big investment decisions to make, so get in touch with Jordan & Halstead for more information about how we support the landlords we work with.
Buy-to-let is a long term investment that can generate reliable yield over a long space of time. However, it means that making a profit from your investment often takes longer than with buy-to-sell properties – although it comes with fewer risks.
Buying a building to sell on always comes with its risks, no matter where in the UK you are investing. A new build off plan requires development work – something that can often hit a hurdle or stall, leaving you in the dark. The finished product may not be quite what you expected, and working with a developer means introducing a third party that is out of your control. Selling the property can also bring its own problems, depending on the area – leaving you to pay off the mortgage until you find a buyer.
Of course, the main benefit of buy-to-sell investment properties is that you can often get an excellent deal, potentially selling the property on for a profit. Decorating, furnishing and refurbishing can often raise the property value, meaning a much quicker turn around on your investment that buy-to-let investment properties.