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There are lots of reasons why you might be thinking about making your first property investment. The UK property market has a lot to offer first-time investors, with a range of opportunities offering excellent potential for return on investment. Before going ahead with your first buy to let investment, it is important to find out about some of the things you should know with this beginner’s guide to property investment.
Think about financial issues
There’s plenty to think about when it comes to the financial elements of a property investment. Buy to let mortgages are an area to consider if you need a hand with the funding of your investment, so if this is the case with you, it’s vital to get clued up on how to go about securing this type of mortgage. Other financial issues investors need to know about include tax on rental income, capital gains tax and stamp duty tax. To get better clued up on these finances, it might be worth speaking to a financial adviser to make sure you’re fully equipped with the right knowledge and ready to get started with your investment.
Consider the location
When investing in the UK property market, there are certain areas that offer the best opportunities and some areas you should avoid. As of late, the best cities for property investment include Manchester and Liverpool, with these Northern cities boasting the most attractive rental yields, affordable property prices, high demand and capital growth potential. On the contrary, London is one of the UK’s worst cities for property investment, with high property prices and slowing rental price growth resulting in some of the lowest average rental yields in recent years. First time investors should definitely spend time researching the best area to make their investment in, choosing reputable companies such as https://www.rw-invest.com/london-property-investment/ who offer opportunities in prime UK cities with some impressive rental yields.
Research property types
Are you more interested in investing in an older or newer property? Both period properties and new builds have different benefits and disadvantages to consider. For instance, new build properties benefit from being more eco-friendly and more affordable to run, whereas period properties can attract tenants who prefer a building with more character and history behind it. Ensure you do some research into different property types and think about the qualities that matter most to you in an investment property.
Know your customer
Last but not least, it’s important to really understand your potential customer to get a better idea of the best property for you to invest in. If you’re targeting students, for instance, invest in student accommodation that has a modern and high-quality design, and is based in a prime location close to university campuses. Location is also key if you’re targeting young professionals, with this type of target market commonly seeking residential property based in the city center and close to their workplace. On the other hand, families or older tenants are likely to want to rent residential properties in more suburban areas, so it’s a good idea to really think about what your prospective tenants want from a rental property in order to attract high levels of demand.