Investment, A Hunters' Game

I have been looking for lots of properties for clients recently. Investment property is something which needs to be carefully considered. All questions are important when looking for the right property. From rental yield and capital growth to “What type of tenants will I get?” and “Does this kitchen look good?”. The pros and cons of individual properties can be numerous. So how do you start looking for the right property to buy to let?

Firstly, how much to spend. Investment is about spreading out risk: if you have £200,000 in the bank, it would be best to spread this out over 2-4 properties, rather than one. This will reduce your risk and increase your return on investment. Now you have established how much to spend, you need to know where to buy. Go and see your local Letting Agent and they will tell you about the pitfalls and traps of certain areas. Sit down with your Letting Agent and take a look at what is on the open market. Once you have decided your general area, you are ready to start looking. Obtain details of some properties you are interested in and then take them back to your agent to discuss if they are suitable. You need to find out: • What is the rental yield based on comparable properties? • What is the immediate area like and what type of tenants would apply? • What is the churn (rate of moving) of the properties on that street? • What is the capital growth, recently (last five years) and historically (last 15-20 years)? • Do I need to invest more money to bring the properties condition up to reasonable rental yield? • What range of offers should I put in? What is the maximum I should offer? You and your Letting Agent and should establish quickly which properties to rule out, then book your viewings. If your agent is free, he/she might be able to come and view the houses with you or alternatively, advise you based on your report. After locating the right property, get the right price for it. It may not sound simple, but it is. Once the vendors go above what you are willing to offer, move on - there are plenty more fish in the sea! Once your offer is accepted, get a good conveyancer in place and progress the purchase. In the meantime talk with your Letting Agent about required maintenance, marketing and getting a tenant asap. Get the ball rolling as soon as legally possible. That’s it! If you want to talk more about this process and what Martin & Co. can do for you, please call me, Andy on 0121 321 6090 and let’s see what investments are out there for you!