Being a landlord and managing an investment property can have many benefits, but it also comes with its challenges, whether you are looking for a buy-to-let property, or want to add value by renovating a property and then selling it on for a much higher price.
At least one in six people on this year’s Sunday Times Rich List owes their wealth to property or the world of home ownership in some way. But before becoming the next Lord Sugar, have a look at our top tips for buying an investment property:
- Don’t let your emotions get in the way – this is an investment property, not your own dream home
- Do your homework – research the area, the amenities, the schools, the transport links, the property market in general, and the type of tenant or buyer for the property
- Before you buy – consider getting specialists to take a look at the project before you buy e.g. a builder, architect or electrician who can give you more accurate costs for any work needing done
- Secure a down payment – remember that investment properties will have different mortgage and insurance requirements
- Do your numbers – adding value will require initial outlays. From builders to surveyor to architects, make sure you know your costs. And depending on the project and your experience add between 10 – 20% for contingency
If you are new to this world, then select a low-cost home as your first investment property. If the numbers don’t add up, walk away. To add value listen to your head not your heart when it comes to an investment property.