While property can be a very lucrative and successful investment, it is not without its risks. It is becoming increasingly popular these days, especially after the economic recession and stock market investing still being relatively risky. Creating a successful property investment portfolio will always require a good knowledge of the property market, the location, and the current economic climate, so you should always find out as much as you can before buying a property. There are also a variety of property investment options, so it is worthwhile to consider some property investment tips before you start looking for the perfect investment property. property heat map
1. Research the property market
The first essential step you should take before choosing a property for your investment, is to do your research. Join a property club, sign up for a seminar, or just simply read as much about the basics of property investment as you can. This will enable you to identify lucrative opportunities and deals that are bound to be unsuccessful. You will have to find out as much as you can about the financial factors of a real estate investment and about basic strategies. You will also need to be informed about current economic trends, to be able to make informed choices, and research popular or emerging property locations.
2. Set out your aims and survey your financial resources
While searching for potential investment properties, you should also clearly set out your aims, profit expectations and also survey your financial resources. Firstly, the type of property investment will indeed greatly depend on the initial amount you can invest. If you can afford to buy an expensive property you can naturally expect larger profits, but you can definitely make good returns on a smaller budget as well. You will also have to decide if you are looking for a short term or a long term investment, which will be dependent on your chosen investment property and exit strategy.
3. Decide what kind of investment property you are looking for
The process of choosing an investment property can seem daunting to the inexperienced investor. The two main property types are residential and commercial properties. While residential properties can offer more flexible investment options, commercial properties need a larger initial investment but can lead to higher yields. Buying an overseas property is another option, which means that risks can potentially be higher, but you have more flexibility and a better chance of securing higher profits. BMV properties, or below market value properties are also popular, as they enable investors to get high returns from a small initial investment. A buy to let property is a long term and relatively safe investment, where your main source of income is the rent paid by your tenants. Always consider the advantages and disadvantages of all these property types and your desired outcome before making a final choice.
4. Don’t forget the location
Location is possibly the single most important factor when it comes to property investments. A bad location will almost invariably lead to failure, while a good location is the basis of success. Economic stability, good living standards, and economic developments are always positive signs. If you are investing in a buy to let property, it is also essential to buy the property in a good neighbourhood, with many local amenities, otherwise it won’t be an attractive property for potential tenants. It is also worthwhile to research emerging markets, where property prices are still low, but new investments are bound to lead to future property appreciation.