Now that you have decided that you want to invest in property, how do you go about making it happen?
This article is the start of a series on how to invest in property. This method will serve as a general outline for how you can do it. Note this is not the only method out there, but it will serve as an excellent guide to newcomers and help set you on the right path to success.
The Steps to Investing in Property (Real Estate):
Click steps for links to articles that describe each step in more detail.
- Decide what you want to achieve with your investment.
- Decide how much do you want to invest. If you choose to invest with a mortgage, now would also be the time to speak with a good broker and get a pre-approval to ensure you understand both the reality of what you can get mortgaged and what the costs will be.
- Decide how much risk you are willing to take on.
- Decide if you will focus on investment type or investment location.
- Now set up your team around you, you will need:
- an excellent solicitor who specialises in property,
- an excellent agent who works in the area you are interested in or deals with the kind of properties you are looking for,
- an excellent mortgage broker if you are going to mortgage your project,
- an excellent tax advisor.
- Search for the kind of properties you are looking for within your budget.
- Study what you can get for your money. See the properties, look at lots of options online.
- Understand the relative value, know what your money will get you.
- Find the properties that offer the best relative value based on your needs that you have set out.
- Properly inspect the properties, know what you are getting into with the project.
- If your proposed project requires work, get quotes for it now before you start compiling an offer.
- Make an offer based on what works for you. If you can't make the numbers work at the purchase, you are more than likely setting yourself up for failure.
- Ensure that all inspections and surveys and processes are completed to exchange on time, you don't want to be the cause for delay.
- Once exchanged start scheduling in any works required (this will also depend significantly on the kind of project you take on, for this we use the example of a rental investment that needs some work but not a complete refurbishment)
- Complete your purchase and ensure works get started & completed promptly, the property is not benefiting you sitting empty.
- Appoint a Lettings & Management agent to rent out and manage your property. I believe that if you are taking on your first few projects, it is especially important you get everything right and not overlook any regulatory requirements. An excellent L&M agent will be worth far more than they cost.
- Have prospective tenants properly verified and references thoroughly checked.
- Make sure the tenants have a good move in experience; happy tenants lead to a much better quality of life for you and them.
- Inspect the property regularly at the start with your L&M Agent. These inspections are both for your benefit and that of the tenants.
Now enjoy the benefits of your investment, set aside money for future improvements and repairs, save for your next one.
In the coming weeks, we will explore each step in more detail. In the meantime, should you have any questions, please feel free to contact me.