First time property investors can face a potentially bewildering array of choices when they first begin to consider their options. It can seem like a daunting business, but if it’s something you’ve been mulling over, don’t let some vague apprehension stop you. Thousands of new investors enter the market every year, all adopting different strategies to suit their individual needs. It doesn’t need to be difficult. You can tackle everything in simple stages and there’s always plenty of help and advice available to you.
Tip 1: Seek good advice.
Firstly, let’s reflect on that point about advice. It’s important recognise that no first time property investor could be expected to know the ropes from day one. It’s always a learning experience. The market has changed considerably in recent years and even the most seasoned landlords can find it a challenge to stay abreast of new regulatory requirements and all the best ways of improving profitability. That’s why it’s so important to seek out the best advice you can.
That advice could come from a variety of sources. Industry magazines and websites are a useful place to start. You can hear about other people’s experiences and mistakes, while news and feature articles can alert you to things like tax rules or suggestions for improving your chances of success. Doing this sort of research is always a good idea – it will help you acclimatise to the property investment market. You can also bolster your experience by keeping up to date with newspaper property guides and by visiting estate agents in the areas you might be considering for investment.
Friends and family could also be a source of information, but beware of being led astray by a well-meaning anecdote or suggestion. Unless they happen to work in the industry, friends will typically only be able to tell you what has (or hasn’t) worked for them; they won’t necessarily have a good grasp of all the other options that you should be taking into account.
By all means start with simple steps such as these, but to give yourself the best chance of success, it really does help to talk to a property investment specialist. Whether you call them or visit them in person, it’s important that you take the time to discuss your requirements, your circumstances and your attitudes to risk.
We’re one such specialist, so it might sound like we’re blowing our own trumpet here, but we’re really just pointing to a simple fact. Whether you talk to us or some other property investment business, starting a conversation with someone who really knows the sector is a very sensible first step.
Tip 2: Get your strategy right.
The reason this first stage is so important is because it will help you to decide upon the strategy that’s right for you.
If you’re going to make a success of property investment, then you need to treat it like any other big decision. So firstly, you’ll need to decide on your objectives and what you can realistically expect to achieve, given your financial and family circumstances. Many factors will influence these judgements, including (amongst many others) your age and your attitude to risk, as well as your income, assets and outgoings.
No two investors are alike. There may be people in very similar financial positions, but some might be investing for their own retirement while others might be prioritising their plans for leaving a legacy for their children. Personal factors like these are why no single magazine article is ever going to give you sufficient grounds to make a decision; a good strategic decision demands serious thought and discussion, ideally with someone who can give you clear and comprehensive information about all your options.
Tip 3: Don’t rush it.
Property investment shouldn’t be an impulse decision. It works best as a long-term venture, so you should always make time for discussion, planning and research. Not even a professional investment house with all sorts of opportunities on its books will rush to propose something. The reputable ones will take the time to understand all your objectives and preferences, and only then will they start the match-making process.
The point is, finding the ‘right’ property is about finding the one that best meets your needs. For example, are you driven mainly by a desire to generate a regular rental income, or are you looking for a property that will hopefully gain substantially in value? Or do you want to find a good balance between the two? Are you looking for an investment you can manage yourself (a viable option if you’ve got time and you’re handy with a toolkit) or do you want to leave maintenance and rent collection to an agency?
There are all sorts of questions to consider and, of course, answering them takes time. But that’s time well spent because a good decision at this stage should set you up for a successful investment that achieves exactly what you want from it.
You’ve probably noticed that we haven’t even started to look at questions about location, or even the different types of investment property, such as serviced accommodation, flats, family homes, student accommodation or HMOs.
We covered many of these questions in a previous blog – ‘50 things to consider with investment property’ – but for first time property investors, these are all considerations for the next stage of decision-making. Before that comes the vital business of making sure that you really understand your objectives, your circumstances and all the options that are available to you. At this stage, the advice of a good property investment advisor can be invaluable.
It can be an advantage to work with a local advisor so that you can meet them in person and really get to know them, but many investors are happy to talk with their advisors remotely, via phone and email. Whichever approach you favour, be sure a) that you can get advice when you need it, and b) that your chosen advisor can give you access to a much bigger list of opportunities than you’d ever be able to research on your own.
Talk to us:
If you’re a first time property investor, please call one of our advisors. We offer free advice, without any obligation, and we’ll always be happy to spend as much time as it takes to understand exactly what you want to achieve.
Call us today on 01244 343 355.