50 Things to Consider with Investment Property
Property investment has performed well over many years and offers the prospect of both capital appreciation and regular monthly rental returns. Investors at every scale - from individuals to professional fund managers - continue to use property investment as a way to make their money work harder.
However, making a success of property investment relies on making a number of important choices. What's more, those choices are very personal - dependent on individual objectives, budgets, needs and attitudes - so there's no guarantee that what's right for you will also be right for someone else.
In this article, we look at some of the many things to consider with investment property before you take your next steps.
1. Am I Ready to Invest?
Everybody's circumstances and objectives are different, so no one can tell you whether you're ready - or at least not without spending considerable time talking with you and asking many of the questions below. And it's more than just a question of willingness and 'gut feeling'. Readiness is also about your financial position - your savings, your income, your outgoings and all those other questions that a mortgage lender might ask.
2. Am I Rushing In?
Thankfully, very few new investors are naive when they enter the sector. Most people recognise that property investment is a serious business, and one best regarded as a long term commitment. No one doubts that it demands thought and research. However, one group that can sometimes feel rushed is families of people who have died and left property as part of their legacy. These 'accidental investors' don't have the luxury of being able to choose the time, type and location of their investment. Suddenly, they have an extra property on their hands and they have to decide what to do with it. If that sounds like you, then it's very important that you seek good, impartial financial advice as early as possible. Not every property is a sure-fire money-spinner, so don't be rushed into becoming a landlord. Get the advice, do your research and then decide whether it's best to let the property or sell up.
3. Attitude to Risk
How do you feel about risk? Often, higher rewards come with higher risks, but most investors who choose property do so precisely because it has a good track record and is historically less volatile than many other asset classes. Professionals tend to regard property as a steady, long-term performer. Nevertheless, it's still a good idea to consider the impact of an absolute worst-case scenario. If the worst should happen, how much could you safely afford to lose? Don't take on so much risk that a single bad investment would be ruinous.
Your investment choices might also depend on your personality; if you will constantly be worrying about costs and every slightest change in the market, then perhaps you'd be happier with a more predictable savings account. The returns will almost certainly be lower but here's where you need to be realistic about how you think you'd take to the role of investor/landlord.
5. Risk and Assurances
If you're generally risk averse but you're still attracted by the idea of property, one of the things to consider with investment property is that some opportunities come with the security of rental assurances. In many cases, developers of a new - or newly converted - property will want to attract early investors in order to improve their cashflow. (Building properties is expensive, after all.) To encourage that, and assuming they are confident of attracting tenants very quickly, they may offer rental assurances for a fixed period - e.g. 2, 3 or 5 years. Over that period, you'll earn a guaranteed percentage rate of return, regardless of whether or not your property is tenanted, and that return will usually be far in excess of anything that could be achieved via a bank. This minimises your risk, and you'll be able to use this assured tenancy period to learn how the market really operates. By the end of the period, you'll be better informed, you'll have a better sense of your profits, and you'll be in a better position to decide on your future strategy.
6. Personal Finances
Investment is ultimately about the use of money, so your starting financial position is an important question. Some people invest because they are sitting on a large lump sum and feel that it ought to be earning better returns. Others invest because they have looked at their earnings and decided that they can afford to invest in a buy-to-let property, provided that they take advantage of a buy-to-let (BTL) mortgage. Whichever route you plan to take, always consider that investment property does inevitably entail some level of risk, so don't over-stretch.
7. How Much of My Savings Should I Use?
You'll obviously need savings if you are going to buy a property outright or if you're going to put down a deposit on a BTL mortgage. However, ask yourself whether you are leaving enough savings for yourself. Life goes on, whether you're an investor or not, so it's important to retain a sensible level of savings to cover unforeseen expenses. No one wants to borrow more than they have to, but don't leave yourself financially exposed.
8. Should I Buy Outright?
If you have the money to buy a property outright, that's sometimes an attractive option. Once you've bought the property, you won't have to make regular mortgage repayments, so your monthly profits will be higher. However, does that mean you've put all your eggs in one basket, and if so, are you happy that the risks are acceptable? If not, you might want to consider using a Buy To Let mortgage for your investment property.
9. Should I Take Out a BTL Mortgage?
Currently, BTL mortgages are being offered at historically low rates. There's a huge amount of competition between lenders and they are working hard to win your business. If you don't have the savings to fund a purchase outright, then a BTL mortgage is essential. But, in fact, there are certain advantages to taking out a BTL mortgage, even if you can afford to buy outright. For example, a mortgage will reduce your initial investment cost, so you'll be committing less in the early stages. That leaves you with more money in reserve and, as you gain confidence in the sector, that might create an opportunity to think about spreading your risks with a second, parallel investment. Using a BTL mortgage also affords an opportunity for leverage.
10. Can I Take Advantage of Leverage?
'Leverage' is the principle of using borrowed money to achieve a higher rate of investment return. It means you use a lender's money to pay most of the purchase cost, but if the investment gains in value, you then get to keep the full value of that capital appreciation. The advantages are perhaps best shown using an illustration.
Property price: £250,000
Investor's cash deposit: £50,000
Mortgage loan: £200,000
Annual rise in property value: 4% (i.e. up by £10,000 to £260,000)
In this example, you (the investor) would gain the full £10,000 of capital appreciation, despite only having contributed £50,000 of your own money. That means you'll have enjoyed a return of 20%, rather than the 4% you'd have seen from an outright cash purchase. In other words, leverage has multiplied your return on investment by a factor of five. Of course, you would have to make regular mortgage payments that would reduce the net value of this return, but your money would still be working much harder.
11. Fixed Rate or Variable Rate Mortgage?
Typically, variable rate mortgages will start out cheaper than fixed rate mortgages, but there will always be the risk that the variable interest rate will rise over time. Investors who like to plan with certainty will often prefer the fixed rate product. Moreover, because rates are generally very low at the moment, there isn't much room for a big price difference between fixed and variable rate deals.
12. Fixed Rate Periods
Lenders are currently offering mortgages with fixed terms of 5 and even 10 years. Some of these are set at around 2.3%, which is low by any standards. This provides security against future rises in the base rate of lending, which would force lenders to raise their variable rates. This is important because the Bank of England has signalled several times that it expects to raise the base rate slowly and incrementally over the coming years. Since no one wants to see extra mortgage repayment costs eroding their profits, and no one can predict how the economy will be performing in 5 or 10 years' time, fixed rate products are currently very popular.
13. What is the LTV Ratio?
Another factor to consider when choosing a mortgage is the loan-to-value ratio. This is very much what it sounds like: a ratio comparing the amount you borrow against the total value of a property. The highest rates commonly top out at around 85% but investors can choose to borrow much less. Higher rates of borrowing allow investors to retain more funds and better cashflow for other investments, but they inevitably mean having to repay a higher sum each month. Conversely, a lower amount of borrowing will mean lower repayment costs. Choosing the right LTV ratio therefore depends on how much you need to borrow, balanced against how much you are prepared to contribute yourself, and what else you might want to do with your money.
When deciding whether to borrow, and how much, bear in mind that you will have the chance to remortgage if you wish. You might want to do so because, for example, your fixed-rate mortgage has reached the end of its term and you want to move to a better rate. Whatever the reason, you'll normally have lots of choice, but don't make a decision based on rates alone; many BTL remortgage products come with extra fees attached, and these can offset the apparent benefits of a lower rate. It's the total cost that matters.
15. Predicting Cashflow
When planning your investment, it's important to think about cashflow and profit margins. Do the maths and ensure that you are giving yourself enough of a financial buffer to protect yourself against factors that could erode your returns. Examples might include 'void' periods between tenants, unforeseen repair costs, increases in taxation and so on. If your safety margin looks slim at the outset, consider looking for a safer investment.
16. Have I Accounted for Stamp Duty?
Landlords are subject to a raft of taxes, many of which have been raised in just the last few years. These all need to be accounted for when planning your financial projections. For example, Stamp Duty Land Tax (SDLT) is payable when you first buy an investment property. Since 1st April 2016, investors have had to pay an additional 3% rate of Stamp Duty on purchases of buy-to-let properties.
17. What About Income Tax?
Income tax is payable on the profits from your monthly rental income. However, you can use certain costs to reduce the total tax that you have to pay. Some examples of costs you can offset against rental income include water rates, any ground rent you have to pay, management and legal fees, insurance costs, and costs associated with repairs and maintenance. For the moment, you can also offset some mortgage interest payments, although the amount you can claim has been falling steadily since April 2017. By April 2020, you won't be able to claim any mortgage interest tax relief at all, which is definitely something to consider with investment property.
18. Will I Need to Furnish my Property?
Some new and off-plan properties are sold ready-furnished and others come with furniture packs available as a discounted 'extra’. However, there are few fixed rules about furnishings. Many conventional buy-to-let properties are sold essentially empty, and tenants are expected to bring their own furniture when they move in. On the other hand, if you want to attract high-paying tenants to an attractive city-centre property, leaving it bare probably won't make a good first impression. If you are investing in a serviced or short-term let apartment, then good furnishings will be essential.
19. Will I Need to Pay an Agent?
Though it isn't necessary to use one, rental management agencies and lettings agents can be useful allies for landlords who want a low-stress 'armchair' investment. They will usually take care of maintaining the property, advertising it to tenants, collecting rent, paying routine utility bills and, in most cases, dealing with tenant enquiries. They are also helpful for investors who want to build a large portfolio and who won't have the time to manage each property personally. There is, of course, a cost associated with using an agency, so it pays to shop around and seek references before committing.
20. What About On-Site Agents?
In some cases, units in a new development will be offered to investors with a rental management agency already in place. In such cases, you may have no choice but to regard this as part of the package deal. However, such agencies are generally chosen by the developer precisely because they know they can do a good job and maximise occupancies within the building. Since achieving a regular, uninterrupted rental income is a high priority for investors, this sort of on-site support can often be very welcome.
21. How Do I Start Looking for a Property?
Once you have satisfied yourself that you can make a good financial case for investing in property, and that you understand all the issues that might affect your revenues and costs, the big questions are then where to invest, and in what sort of property? One very useful place to begin is with a reputable property investment house; a company whose advisors can talk you through your options, get to know your circumstances, and help you to develop a sensible strategy for investment.
22. Taking a Practical View
When choosing a property, remember that you are looking to make an intelligent financial investment, not buying a second home. It's a business decision, so your choice shouldn't be influenced by personal tastes. From your perspective, the property's only role is to deliver a profitable and sustainable return.
23. Yield or Capital Growth?
When thinking about what sort of property you want to invest in, an important question is what you want it to achieve. In recent years, average house prices have risen only quite slowly, and most forecasts aren't suggesting that they will accelerate much any time soon. Consequently, many investors are making yields their priority and selecting properties accordingly. For them, the ideal properties are low in price but capable of delivering good and regular rental incomes. This is one reason why the traditional north/south divide in the UK property market has reversed recently, and some of the best results are now appearing in northern cities such as Preston, Liverpool and Manchester. This is not to suggest that capital appreciation should be disregarded; good, steady growth may still be possible in certain well-chosen pockets of the country.
Whether you are targeting yield, capital growth, or a mixture of both, a good investment relies on a careful choice of location. There are plenty of opinions out there about the best buy-to-let destinations, but there's no substitute for hard data. Researching a location takes considerable effort, and this is another instance where the help of a good investment house can be invaluable. Such companies have the resources to conduct detailed research and to flag up many of the key indicators of a good or bad location.
25. Target Market and Tenant Profiles
In any given area, investors need to gauge the extent of local rental demand, and what types of property are most needed. A careful study of the location should show you where the majority of tenants are likely to be coming from. In a fast-growing urban powerhouse, they might be high-paying professionals who want quality accommodation close to the centres of employment. In popular cities, they might be short-stay tourists who will be prepared to pay more for a luxury short-term let apartment. In a seaside town, they might be retired folk who might want something small, quiet and manageable. Different customer groups will seek different types of accommodation, and you need to know what the local market wants the most. Never rely on broad generalisations when making your choice; take advantage of as much on-the-ground research as you can.
26. Where Do I Find The Data I Need?
Good market data is invaluable. The easiest option will be to talk to property professionals. Investment houses will perform detailed research on certain locations and they can save you a huge amount of effort if you're happy to consider their suggestions. However, no organisation can possess detailed local knowledge about every location in Britain (to say nothing of overseas opportunities), so you might also want to refer to property magazines, newspapers, the BBC and the websites of building societies and organisations such as ONS and RICS. The important thing is to try to seek out the most impartial sources of information you can, and to build up a rounded picture based on multiple reliable sources, not a single journalist's opinion.
27. How Reliable Is Regional Data?
Broad national patterns and regional data are great for newspaper headline writers, but they're all but useless when it comes to choosing a location for an investment. Every local market is different, and a distance of just a couple of streets can make a big difference to the appeal and value of a property. Before committing to any investment, be sure that your information takes account of these local-scale variations; get all the research you can about conditions in the specific postcode you're considering.
28. What Do I Look For in a Location?
Different destinations appeal to investors and tenants for different reasons, so there is no single magic formula when considering investment property. However, economic growth is usually a good indicator of an area's rising fortunes, so look out for a mix of the following:
Large-scale public sector infrastructure investment - e.g. roads, rail, ports, internet connectivity
Government economic funding - e.g. 'city deals', Northern Powerhouse funding, HS2 project etc.
Private sector investment - major employers investing in new premises or facilities
The presence of modern, high-value 'growth' sectors such as bio-sciences, digital industries, renewable energy, advanced manufacturing, tourism etc.
Population data - rising or falling?
GDP per capita - rising or falling?
Another thing to consider with investment property is that universities can also be a catalyst for economic growth and, of course, they often create a steady and lucrative market for student property, too.
29. Local or UK?
Some investors like to invest in their local area because it's familiar to them and because, should the property need attention, they can inspect it (and possibly fix it) themselves. There's some logic to that but be aware that such a policy will restrict your options and you won't necessarily be investing in the most lucrative deals for you. Casting your net more widely can give you access to some excellent deals but, of course, a more distant location will probably mean that you'll need the support of a letting agent to handle some of the day-to-day chores.
30. What About Overseas Property?
The UK has no monopoly on good property investment opportunities. There are attractive deals to be found in many parts of the world. However, to take advantage of them, you'll need to consider a range of additional concerns, and the support of an in-country agency might be essential. Generally, the same principles apply as for the UK: you'll need solid local research to underpin your decisions and you should be confident that the property meets the needs of the local market. But in addition, you might need help with translations, with local marketing, and with unfamiliar legal and contractual matters. You might need to consider different tax arrangements, and you may face further complexity if and when you come to sell. At present, the Pound is relatively weak against currencies such as the Euro and the Dollar, so overseas properties are comparatively expensive for British buyers.
31. Warning Signs
For every good investment opportunity, there will probably be plenty of bad ones, so it's important to recognise some of the warning signs with investment property. You can check the well known house price indices to see in which direction property prices have been trending in any given region, and some diligent internet research should point you towards recent rental yield maps that show which areas are producing the best returns. (Some of them drill down to the postcode level, which is certainly more useful than city-wide averages.) Warning signs can include falling or stagnant property prices, falling average yields, and newspaper headlines describing large scale redundancies or big employers relocating elsewhere.
Another concern might be the construction of large, modern property developments in the same area as your own intended investment; too much competition can drive down yields and, in the longer term, perhaps even suppress capital values.
33. Should I Follow Popular Investment Trends?
If a city's fortunes are rising, then investors are usually quick to spot it. This happened with Manchester and Salford a few years ago, and much the same is now happening in Liverpool and Birmingham. For new investors, the key issue is timing, because once too many investors have jumped aboard the bandwagon, buyer demand increases and property prices tend to follow suit. Early investors will tend to enjoy the best yields but that's not to say that those who come later will lose out; there may still be some good investments to be made - it's just that as prices rise, so it becomes harder for new investors to find really good deals and to generate those same attractive yields.
34. Are the Best Deals to be Found in Cities?
It's important to recognise that property market conditions vary widely, not just between cities but also between neighbourhoods. Currently, for example, some of Liverpool's coastal and central postcodes are generating some of the best yields in Britain, but that's not true of every district in and around the city. Conditions further inland might be very different, so just because an investment is advertised as being 'in Liverpool', it doesn't follow that the property is located in an ideal location for investors. The bottom line is that detailed local research is required for every investment, whether it's in a popular city or not.
35. What About the Student Market?
Some investors specialise in student properties because they offer certain advantages. Most obviously, demand is usually seasonal and very predictable. What's more, such units often deliver very good yields, because they are often cheap to buy and yet the rental returns can be excellent - particularly in some big university cities such as Nottingham, Liverpool, Manchester and so on. In some UK towns and cities, returns of 7% and more can currently be achieved.
36. Student Property Limitations
One of the restrictions of student property is that BTL mortgages aren't normally available to help you buy one. That's because student lets tend to be small, and lenders don't generally offer BTL mortgages on properties with an area of less than 30 square metres. That means that you'll probably have to find the cash to buy it outright - and if you ever want to sell it, you'll only be able to sell it to another cash buyer. It also means you won't be able to use a mortgage to gain a leverage advantage.
37. What About Off-Plan Projects?
If you are happy that a particular location will sustain good rental demand, then it might be worth thinking about new, off-plan developments. Here, the developer will want to sell a proportion of the units early on, usually to facilitate better cashflow, and to do that, investors will be offered attractive pre-market rates. That means you'll be buying at below the usual market rate, so you should see rapid capital appreciation, and you could potentially make good profits should you wish to sell later on. There may also be other inducements, such as rental assurances and guaranteed returns for a fixed period. These can represent some of the industry's lowest-risk investment, subject to a few important provisos.
38. Risks with Off-Plan
Possibly the biggest risk with off-plan developments is that the developer goes bust part way through the project, so look for developers with a strong reputation, and make sure that any payments you make are protected with some form of insurance-backed guarantee. Then, if the worst should happen, you will at least get your money back.
Another risk is that the property could be aimed at the wrong rental market - it might be overpriced or wrongly configured - e.g. offering three-bedroom houses in an area where what the market really needs is single-bedroom flats. If it doesn't provide the type of accommodation that would-be tenants actually want, it is unlikely to perform well. This is yet another example of why detailed research is needed, and why the due diligence performed by reliable investment houses can be so valuable.
39. What About House Conversions and HMOs?
In 2018, news services reported that houses in multiple occupation (HMOs) had, on average, produced the country's best yields, delivering returns of just over 7%. On the face of it, HMOs are attractive to investors; they are essentially house conversions designed to maximise rental income by creating as many bedrooms as possible. In that sense, they are very likely to outperform conventional houses when it comes to rent. However, their cost-effectiveness depends on whether you intend to buy a house and convert it, or whether you intend to buy one ready-converted. The first option entails a lot more work but should produce more overall profit; the second is easier but you'll probably pay a premium; certainly more than you would for an equivalent sized house in the same area.
40. How Easy are HMOS to Manage?
Every property and every group of tenants is different, so different landlords may give different answers to that question. However, HMOs inevitably entail managing more tenant relationships - which gives rise to extra work - and the more tenants you have, the higher the risk of encountering some difficulties. Generally, it's probably safe to assume that HMOs will require more 'looking after' and more routine maintenance than other types of investment, but there is no fixed rule.
41. What About Serviced and Short-Term Let Apartments as an Investment Form?
Firstly, what are the differences between short-term lets and serviced accommodation? Although similar in many respects, the main factors that differentiate short-term lets and serviced accommodation are terminology and management style.
Serviced accommodation is considered a restricted-use property which has been purpose-built to accommodate guests and offer hotel-like amenities, such as room service and a concierge. This can impact the appeal of your property to mortgage lenders as it is not considered resaleable. Owners are not able to rent out this type of accommodation on an Assured Shorthold Tenancy Agreement (AST), live in it or manage it.
Short-term lets are unrestricted apartments offering a variation of management on standard apartments. This means that not only are you able to live in and rent out on an AST – and we will manage this on your behalf under the Short-Term and Corporate Let model. Visitors will usually pay a single fee that covers the cost of the cleaning services, plus the cost of any associated facilities, utilities and taxes. Short-term lets offer something similar to a hotel-style experience and, like hotel rooms, they may be rented for short or longer periods.
Key selling points of short-term let apartments include their space, quality, modernity and their affordability in comparison to hotel rooms. They tend to achieve good rates of occupation and deliver better rental returns than conventional flats, which would typically be let out for less, but on a longer term basis. They will usually be supported by a rental management agency, which will keep the properties in peak condition, so they may create fewer headaches for investors than conventional lets and HMOs.
Your apartment is maintained and cleaned on a weekly basis, and you are notified of any changes quickly. If you wish to sell, your property will benefit from a clear and proven track record of success, and unlike serviced accommodation, you will be free to sell your apartment to anyone on the open market. From our experience, investors prefer properties with a good history on a % yield basis, which short-term let apartments can achieve.
Short-term let apartments are an increasingly popular form of investment, and they are becoming increasingly popular amongst visitors, too.
42. Tourism and Seasonality
Popular tourist destinations often attract interest from property investors, particularly with regard to new developments such as hotels, villas and apartments in gated communities. Whether you are looking in the UK or overseas, these can be attractive and potentially lucrative, provided that you choose the right match of location and property. In some cases, they might include a 'private use' allowance so that you can also use it as a holiday home. Yields can be good, particularly in peak season, but remember that demand (and prices) will fall sharply out of season, so your financial projections need to take account of annual averages.
43. Legal and Safety Requirements
Once you have decided on your location, your property and how you are going to manage it, you'll need to consider your responsibilities as a landlord. The most important of these is that you must keep your rented property free from health hazards. Amongst other things, that means you must be able to show that all electrical and gas equipment has been checked to ensure it has been properly installed and maintained. (This means paying for regular tests.) You must also fit working fire alarms and carbon monoxide alarms, and you must be ready to cooperate with safety inspectors if the local council decides to perform an HHSRS (Housing Health and Safety Rating System) inspection. You can face stiff penalties for breaching these rules so if you are in any doubt about your full range of responsibilities - and how to meet them - seek professional advice.
44. Energy Performance Certificates
Rental properties must be inspected and awarded an Energy Performance Certificate (EPC.) This measures how energy efficient the property is, and various companies will carry out an assessment for a fee. Since April 2018, a property must achieve a rating of at least 'E' if it is to be rented out. You must show the EPC to potential tenants before they sign any agreement. Details of this and other requirements can be found in the Government's guidance document for landlords: "The Domestic Private Rented Property Minimum Standard."
45. Tenant Deposits
As a landlord, you are entitled to ask tenants to pay a security deposit as part of their rental agreement. However, be aware that there are regulations designed to prevent abuse of this arrangement. Landlords must place their tenants’ deposits in a recognised tenancy deposit protection (TDP) scheme within 30 days of receiving the money. Moreover, you must return the money at the end of the tenancy, provided that the tenants have met the terms of their tenancy agreement, that they have paid the rent owed, and that they have not done damage to the property. In the event of any dispute over how much is returnable, the deposit is protected in the scheme until the disagreement is settled.
46. Looking Ahead - Costs
The preceding list should give you an idea of what costs you might typically incur, but don't assume that your costs will remain the same over time. Early on, you might face higher than usual costs because you're just getting started; as you settle into a routine, the annual costs of insurance , safety testing and EPC assessments can be forgotten about for a while. However, other costs might increase. Wear and tear is inevitable, so be prepared to pay for essential maintenance and periodic property facelifts - e.g. between tenants. Also, remember that government policy can change, so your tax payments can't be taken entirely for granted. Keep an eye on the news for anything that might affect the profitability of your investment and try to ensure that you set your rentals at a level that will give you a reasonable safety margin against rising costs.
47. Looking Ahead - Income
Generally, monthly rental returns will be your only source of income as a landlord. Inflation will inevitably add to your costs over time, so it's reasonable that you will want to increase your rental charges in line with inflation. If changes in government policy or any other external factor should add to your costs, you'll need to consider carefully how much of an increase your tenants, and the market in general, will bear. Raise your fees too high and you could end up with no tenant at all, but equally, don't be tempted to keep swallowing extra costs to the point that you are making no profit at all. To be worth all the effort, your investment should always be earning you more than you'd get if you put that same money in the bank.
48. Building Survey
Once you have done your research and scrutinised the financial details of your proposed investment, your next step is to begin the purchase process itself. In many respects, this can be similar to an ordinary house purchase, particularly if you are buying an existing (rather than off-plan) property. You'll want to commission a survey to make sure that the building is all it appears to be. If you're using a BTL mortgage, your lender will insist upon it.
49. Legal Representation
Like any property purchase, you'll also want to have a solicitor to help you with the necessary paperwork. If you have a family solicitor and it has a conveyancing department, you might want to stick with the company you know. However, there might be benefits to working with a specialist legal practice, especially if your property is unusual in any respect - e.g. set in a historic area or subject to legal caveats that could restrict your options as an investor. If you are thinking of talking to an investment house for advice, ask them whether they can recommend any good specialists.
50. Exit Strategy
The final thing to consider before committing to an investment property is whether you intend to be a lifelong investor, or whether you need to develop an exit strategy. Many people invest as a means to generate a good, reliable income in retirement, and intend to pass on their property to their families after their death, giving their loved ones a working investment that will continue to benefit them. This is a perfectly respectable objective, but it might not suit everyone's plans. If you are intending to sell your investment at some future date, consider your target market (e.g. will you only be able to sell to cash buyers?) and consider when might be the best time to sell. Remember that property investment tends to work best when it's considered as a long term venture, but there may be all sorts of good reasons why you might want to sell. By keeping an eye on property prices and the prevailing market conditions, you should be able to choose your moment wisely.
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Your Next Step...
This list of things to consider with investment property is by no means exhaustive. It's really just an introduction to some of the main issues you might want to consider as part of your overall plan. If you'd like help in developing your investment strategy, please talk to our advisory team. Call us today on 01244 343 355.