When investing in buy to let property, it’s easy to rush into the first opportunity you come across. The property market, however, can have varying success rates depending on the type of property you decide to invest in, the steps you take, and the amount of planning and research you put in. If you’re about to make a property investment and want to be sure you’re taking the right steps, make sure you’re aware of these property investment mistakes that should be avoided.
Not doing your research
Before any investment, you should do enough research on the types of property you could invest in, and the best locations. Without doing so, you could get trapped with an investment that lacks the potential needed to be a success.
In the past, London has always seemed the best UK location for investors to target, but as of recent years, this isn’t the case. Cities like Liverpool and Manchester are now considered the UK’s property hotspots, with low prices, fantastic rental yields, and plenty of opportunity for capital growth. RW Invest is one property investment company that recognises the appeal of these Northern Cities, with a range of properties available from as little as £45,450 with 8% rental yields. Investing in a city with a proven track record of success for property investors is a good choice to make.
It is also important not to rush into choosing the type of property you’ll be investing in, as different types of property can offer different outcomes. Student property is a particularly popular market in the UK as of late, while residential properties in city centre locations will always be in high demand, especially if a city welcomes a high number of young professionals.
Not having any long-term goals
You should establish your long-term goals before going forward with your investment, reflecting on what you hope to have gained from the experience and what steps you could take to further your investment. Ask yourself a few questions and be clear on the answer before making a new investment. For instance, work out exactly why you’re investing, what you hope to benefit from now and in the future, and whether you plan to build an impressive property portfolio that can help you financially during your retirement years. Answering any questions like this will help you establish a strategy and gain clarity on the experience, leaving you in the right frame of mind to make a successful investment.
Not planning your finances
Do you understand the ideal rental yields you’ll need for your perfect rate of return on investment? Have you looked into the best mortgage deals for your needs? The more you plan and research the best financial steps to take, the better your chances of a smooth investment. Not being prepared financially could have a negative impact on your investment and harm its success massively.
Ensure you’re clued up on all the financial aspects of the venture, such as the amount of tax you may need to pay, the cost of expenses for your buy to let property, and other elements of being a landlord. It is also a smart idea to hire a quality accountant to help you deal with your finances, especially those experienced with managing property investors’ accounts.