Property is one of the most popular investment options. While there are risks involved in any new acquisition, if you play the property game right, the chances of winning are high. If you’re new to investing, or you’re looking to build a portfolio, here are some useful tips to take on board.
Choose an ideal buyer or tenant
Defining your target audience is one of the most crucial aspects of property investment. Before you buy a house to sell or rent, it’s critical to make sure that you know who you want to attract. If you’re looking to spruce up a home and then sell it, think about what kind of buyer you’re hoping to see come through the door. Are you targeting young professionals, families or couples looking to retire, for example? If you plan to rent your property out, which market are you aiming for? Are you interested in students, full-time employees or families, for example? It’s vital to have a buyer in mind so that you choose the right kind of project. The requirements and preferences of young professionals are likely to be very different to a couple with three children, for example.
Set a budget
Before you start looking at properties, set a budget. Figure out how much you can afford to spend and make sure you can cover mortgage payments without putting yourself under pressure. Once you have a figure in mind, this will help you narrow down the options and calculate profit margins. It’s particularly important to focus on the figures if you’re interested in a project. You’ll need to factor in the cost of work as well as the purchase price. It’s also crucial to make sure you don’t pay more than a property is worth. Valuations provide a guide, but a house is only worth what a buyer is willing to pay for it.
There’s a reason the phrase ‘location, location, location’ has become a feature of modern-day conversation. Location is a priority for the vast majority of buyers and tenants, and some areas are much more sought-after than others. If you’re buying with a view to targeting families, access to highly-rated schools is beneficial. For young professionals, transport links are essential. If you can’t afford to purchase property in established areas where demand for real estate is high, look for opportunities in communities that are on the up. Keep an eye out for signs of development, for example, new housing, shopping centres and offices. Buying in up and coming neighbourhoods can lead to impressive profit margins.
Flex your negotiating skills
In the world of property, there are deals to be done. Unless you find yourself in a situation where there are multiple offers on the table, or you’re buying in an area where houses come onto the market and sell within days, it’s worth trying to negotiate. It’s particularly beneficial to try and drive the cost down if the property has been up for sale for a long time or the seller is keen to sell quickly.
Property remains one of the most popular investment opportunities. If you’re looking to get involved, hopefully, these tips will help you to succeed.