Whether you are a first-time buyer or a seasoned investor, finding the right property to invest in is always crucial. However, due to the uncertainty brought about by the Covid-19 pandemic, the highs and lows of the UK housing market, and the rising prices of real estate, a buyer must be very careful while investing in property in the UK 2021. Therefore, one should always do thorough market research and weigh all the pros and cons before investing in property, no matter when or where. If you are thinking about investing in property in the UK, here are the top 5 things to look out for, while investing.
Neighbourhood: Be sure to invest in the right neighbourhood
The type of neighbourhood will help you determine the type of tenants that you will get. For example, if you buy a three-bedroom property in a popular school district, you will most likely have families as your tenants. On the other hand, if you buy a one-bedroom flat in the city centre, you will probably rent out your property to professionals and office goers. So, it is essential to invest in the right neighbourhood, depending on the target market. For example, if you wish to rent out your property to families and invest in a one-bedroom flat in the city, you might not find the tenants you are looking for. So, it is essential to understand your target market and then choose the right neighbourhood to invest in.
Average rent: Know the average rent of the area
Your rental income should be sufficient enough to cover mortgage payments, land taxes, stamp duty and so on. So, before investing in any area, you first need to find out the average rental prices in the area. If you feel that you will make a decent return on investment based on the average rental prices, you should go ahead with your investment. However, if the average rental prices just about cover the monthly mortgage, then you will have to start dipping into your savings to cover additional costs such as maintenance and taxes.
Market trends: Understand the ever-changing market trends
Market trends are very dynamic, so you need to understand the current market trends before investing in a property. This will help you choose the right property, make the proper renovations and maybe even help you understand your target audience. For example, due to the Covid-19 pandemic, the demand for outdoor spaces, gardens and home offices increased tremendously. Therefore, landlords who could convert spare bedrooms into home offices, make chic patios next to the home garden and create an outdoor seating space for relaxation and rejuvenation were able to make their rental properties stand out. Hence, it is essential to understand the market trend and invest in properties that can evolve with the ever-changing trends.
Location: The location does matter
You might have heard enough people talk about the importance of location, which is a crucial factor. Most people, be it seasoned investors, first-time buyers, homeowners, or potential tenants, will always consider the property’s location. Try to invest in a property that is very centrally located. The demand for a five-bedroom house in the outskirts will be much lower than the demand for a three-bedroom home near the city, simply because of the location. While investing in a property, always try to choose the correct location. You want to find a property that is close to local transportation hubs, close to school districts or workplaces and one that is very central.
Finances: Be well-prepared with your finances
One thing that you need to be well aware of before investing in a property is the cost of investing in the property. From paying the deposit to paying the monthly mortgage, the fees of the estate agent, property taxes and insurance costs, stamp duty and land taxes, annual maintenance charges, and renovation costs, there is a lot of money involved in investing in property. So, you need to be very well prepared, financially and mentally. In addition, you should get in touch with a financial advisor before making any investment decision so that you can plan out your long-term finances as well as your long-term financial goals. A financial advisor might be able to help you plan out your investment and help you find the right investment.
Are you looking to invest in property? Get in touch with estate agents Sittingbourne today!