How to Become a Property Investor: 10 Proven Tips

Property investment is an industry that’s always changing, which makes coming up with a definitive guide to success difficult.

That said, we’ve spoken to a lot of investors in our time, and there are some common themes that come up. With that in mind, below are ten proven tips from the professionals on how you can become a successful property investor.

Tip 1: Set Your Goals

Like any professional purchase, your first consideration should be what you want to get out your investment. To do this, answer the following questions:

  • How many properties do you want?
  • How quickly do you want to acquire them?
  • Do you want to be a hands-on or hands-off landlord?
  • What’s more important, rental yield or capital growth?
  • When, if at all, would you like to sell the properties?

These are just a few questions you can use to understand what type of investor you want to be. The last thing you want to do is end up managing multiple city centre flats when you’d rather use an agent to look after one suburban house.

Tip 2: Get Your Head Around the Risk

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This article is designed to help you reduce the risks associated with property investment, but don’t ever lose sight of the fact nothing is guaranteed.

While you may be caught up with the upsides, have you considered what would happen if the investment went bad? It’s tempting to think of this purely in terms of money, and if money is all you’ll lose, then you’re in a good position.

If, on the other, a bad investment could risk the roof over your own head, you need to think very carefully. A good rule is to only invest what you can afford to lose.

Tip 3: Start with Location

If you’re new to the world of property investment, then you need to do a lot of research into where you want to buy. This may be informed by the goals you’ve set, such as to invest near to where you live, but for most professionals, they look at all of the UK as an opportunity.

With a little research, you’ll quickly work out the rough areas you should look at, and they might surprise you. For example, none of the best rental yields are found in London.

Instead, the best locations for investment are in the north, with Manchester and Liverpool both particularly popular. Of course, every area has good and bad investment spots, so speaking to local experts is vital.

Tip 4: Think about Future Tenants

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Alongside considering where you want to invest, think about the types of tenant you want to appeal to. This will have a heavy impact on the type of property you buy and, therefore, the money you spend.

If you’re more comfortable with renting to families, then it’s likely that you wouldn’t want a city centre flat above a pub. If your property and ideal tenant don’t match up then you’ll find it much harder to find good tenants and keep them.

Tip 5: Consider Off-Plan Options

Sometimes the best investment deals are found in properties that don’t even exist. This is called purchasing off-plan and can provide a range of benefits, including:

  • A brand new property
  • Input into design and style based on your budget
  • Build warranties
  • The potential for prices to rise while construction takes place
  • Greater attraction to tenants
  • Better rental yields

Like every investment, new builds have to be judged on their own merits, but they are an option that is well worth exploring.

Tip 6: Educate Yourself

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Property investment isn’t the kind of thing you can forget about once you’re in it. The industry has some of the toughest laws and guidelines, and these can change quickly. That means keeping yourself educated is essential to keeping yourself out of trouble.

A good example is taking place right now (March 2019) with the upcoming ban on tenant fees. That means landlords and letting agents will no longer be able to charge for things like references and if they do, they face fines of up to £5,000 per fee.

It’s easy to see how landlords who don’t stay up to date can end up in big trouble, so make sure you know the rules you’ll need to play by before you invest and then stay informed.

Tip 7: Organise Your Finances

Once you’re sure you want to invest in property, take a deep breath and organise your finances before you take the plunge.

There are many options for raising the money to invest in property, so take the time to do some research. You could:

  • Simply save
  • Borrow against your home
  • Rent out a room
  • Borrow from friends or relatives
  • Invest with friends or relatives

Whatever way you choose to raise the money, just make sure you are comfortable with the risk.

Tip 8: Build Your Property Team

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Just as Sylvester Stallone needs The Expendables, so to will you need to build your crack team of property investment experts. Sadly, you won’t need an explosives expert, but you will need a solicitor, accountant, mortgage broker and a few letting agents in mind.

You’ll want each to have a track record of working with investors. If you work with one that isn’t up to scratch, don’t be afraid to swing the axe. Red tape can be one of the most frustrating, time-consuming, and costly elements of property investment, so make sure you have a team that you trust.

Tip 9: Hire Some Help

If you’re serious about investing in property, you should look at hiring someone to look after the day to day management.

All too often, investors underestimate the expertise and experience required in finding high-quality tenants and keeping them happy. That leads to long vacancy periods and loss of income.

Hiring a property management company allows you to be as hands-on or hands-off as you like, which is especially helpful if you see investment as a chance to supplement your existing income, and not a whole new career.

If you buy off-plan, developers will often have a property management service you can use to make the entire process, from build to lettings, seamless.

Tip 10: Take the Plunge

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A lot of people talk about investing in property, but never quite bring themselves to put their money where their mouth is.

So, the last proven tip for becoming a property developer is to take the plunge.

Luckily, taking the plunge doesn’t mean going outside and buying the first property you see. Instead, it means taking your research offline and speaking with an expert about what you want.

If you’re ready to take the plunge, speak to one of our team now to learn more proven tips for becoming a property investor.