How to Assess a Property Investment

When it comes to property investment, making informed decisions based on research is the best way forward. If you have found a property that you are interested in investing in, it is worth taking time to assess it fully. There are several issues to consider when it comes to assessing a property investment, so here are some factors you should bear in mind.

Area Research

Researching the area is one of the most important parts of assessing a property investment. An area can make or break a property investment and investing in the wrong place is a costly mistake. Look at the average house prices in the area and see whether they have been trending upwards or downwards. Look at any local regeneration projects or public works that will add value to the area. Make sure there are transport links and that the area is well connected. All these things are simple to find out but make a huge impact on the viability of the investment. If you live near to the property it is also worth having a visit at different times to see what the neighbourhood is like.

Tenant Demand

You need to work out whether there is actual demand for that sort of property in that sort of location. If it is a new build property like some offered by RW Invest, then the developer and agent will have done a lot of research themselves to make sure there is adequate demand. However, it is always worth doing your own research too. It is also essential to look at what other landlords are charging in rent for similar properties and how long they are on the market before being tenanted. This can give you an idea of how quickly you can let out your property and reduce void periods.

Any Other Issues…

It is important to make sure that there aren’t any extra costs involved in the investment. Or if there are you need to add these to your budget. Some apartment buildings have maintenance costs, some houses may need damp treating, which is an extra cost. All of these add up and can affect your property value. You will need to work out the stamp duty of the property too and factor this in to your calculations. You can also check the council tax, crime rates, flood risk and subsidence risks too.

Market Value

To figure out the true market value of a property there a few things to consider. You need to look at comparable properties to get an idea of this. Look at properties that are nearby, have the same number of bedrooms and are in a similar condition. Try and find the history of the property and make sure you are getting a good price. Look out for red flags, like if someone has bought and sold the property quickly and try find out why. There are several online tools like Rightmove and Zoopla that are great for finding out the selling prices of nearby houses. It can give you an idea of whether the property is below market value, and how much potential profit you can make or value you can add. There are also tools that allow you to get a free valuation from a local property expert, as well as predicted rental yields.

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