When it comes to property investment, there is no one size fits all approach. As with any other investment, property investment requires an approach that is individually tailored to you and your goals. Before you get started, you need to identify your own goals and needs in order to achieve the success that you have in mind. Whilst property investment is an exciting journey, it can be overwhelming and daunting at times and there is a lot to learn as a beginner in order to avoid any costly mistakes. With this in mind, here are 3 property investment tips for beginners.
Know How You Will Finance Your Investment
During the initial planning stage of your property investment strategy, you need to take into account how exactly you will finance the purchase of properties. Before you start making offers on properties, you need to take this into consideration, as well as things such as survey costs, solicitor fees, stamp duty and current property prices.
After a while, the rental income that you generate from your properties will ensure that you can start financing further properties, but the upfront costs involved with investing in your initial property investment shouldn’t be overlooked.
Choose Where You Want To Invest
Deciding the location of where you want to invest is something you need to consider early on. Research is key for this part, as there will be a number of factors that come into play before you decide on where to start investing.
For instance, you will need to know the average cost of property in the area or location of your choice, depending on whether you are looking to invest in commercial or residential property. Then, you need to find out the average rental yield for the area, so that you can rest assured that your investment will return some money. If you are investing in residential properties, then it is also good to know the typical types of tenants in the area, such as students, professionals or families, as this will impact your rental yield.
Once you have decided on the area, it will make choosing a property much easier but in order to get to this point, it is important to remember that it might take a while, so be patient!
Protect Your Investments
One of the most important things to remember when looking to invest in property is how you can safeguard both your property and yourself. There are a number of things to consider when it comes to renting a property and ensuring that any damage to your property is kept to a minimum and knowing how to protect yourself against any financial loss. When the time comes for you to rent out your property, it is recommended that you have a number of terms in your lease which protects you and your property.
In your lease, it is advisable to include a detailed inventory of any furniture or goods in your property which you are including within the rental agreement. When the lease comes to an end, or when there is a lease renewal on the property, you can quickly check the condition of these items and ensure that they are in full working order.
Another way in which you can protect your property is through a “schedule of condition”. A schedule of condition is a survey for both landlords and tenants to use in order to protect themselves by outlining and agreeing to a state of the property and any potential repair work which may be required in the future, right at the start of the rental period. Having a schedule of condition helps to avoid any costly disputes and claims for damages during or at the end of a rental lease.