So you’re thinking of becoming a property investor? If you’re interested in boosting your income, making large returns later in life, and learning some new skills in the process, then you’re certainly on the right track. Property investment is one of the most effective ways to achieve better financial security, but before getting started, you need to prepare yourself first. Read about three of the most essential tips to succeed as a first-time property investor.
Focus on location
The location you make your investment in can mean the difference between a successful or disappointing venture. In the UK especially, the property market is thriving in a number of cities like Liverpool and Manchester, who have seen brilliant rates of house price growth, high rental yields, and growing tenant demand. All of these elements are crucial to making a good investment, with rental yields and demand dictating rental returns, and with house price growth ensuring you can make a good investment when you choose to resell.
While signs of a good investment are always good, you also need to ensure that the city you choose to invest in has the potential to continue thriving in years to come. While the north-west region currently has the best rates of house price growth, predictions suggest that this growth isn’t set to slow down, and this will continue well into 2022. Property companies like RW Invest recognise the potential of Liverpool and Manchester’s property markets, creating investment opportunities that come with yields as high as 7 and 8 per cent.
Consider the property type
After establishing the area of the investment, you should think about the type of property you want to invest in. For beginners, student accommodation is usually the go-to option, as it’s often more affordable than other property types but still has a lot of potential. The student population is high around the UK, leading to a lot of demand for quality student properties.
The other option is to invest in residential property, whether this is an apartment or house. If you want to attract a certain type of tenant like a young professional, then investing in a city-centre apartment is a good route to take. Young professionals are more drawn to properties that are a short distance away from their workplace, surrounded by bars, restaurants and other attractions, and feature a modern design and stylish furnishings. Additionally, if you’d rather appeal to families or older residents, then a buy to let house is the better option, ideally one that’s located in a quiet, suburban area.
Think about growing your portfolio
Once you’ve purchased a buy to let property, you might want to think about growing your portfolio in the future. As a beginner, this should be a slow process and not something to jump straight into. Take time to look around for the right investment, and think about ways you can diversify your portfolio. Diversifying your property portfolio means investing in opportunities that differ in some way, whether in location, property type or price.
Having a diverse portfolio can really benefit you if you’re serious about investing. If anything negatively impacts one of your investments, such as a changing property market, then you’ll always have others which may be performing more strongly.