Young Group

10 Things to Consider Before You Invest in Residential Property

Press Release   •   Nov 04, 2011 17:10 GMT

Here are our top tips for a sound investment:

 

The Do’s

1) Research, research, research
Know the area you are buying into. Regeneration plans and new transport infrastructure are great indicators of up and coming areas and capital protection and appreciation.

 

2) Location
Apply the 10 minute rule for access to transport links, bars, restaurants, and local amenities. Consider who your ideal tenants will be, as they will be renting with a lifestyle in mind.

 

3) Buy well
Consider both price and content. Research prices in the area and look for comparables. Can white goods, flooring or furnishing be included in the purchase?

 

4) Make sure the numbers work
Most wealth is created through long term capital appreciation, so buy a property that supports this type of growth. Include all costs in your financial projections (such as legal fees, stamp duty, service charges and ground rent). Some of these monthly costs are all too often ignored leading to negative monthly cash flows.

 

5) Get the right advisors
A regulated advisor can secure the best deals free from fees and aligned to your investment strategy. Good letting agents will minimise void periods and tenants are likely to pay more rent and look after the property better if it’s professionally managed. Remember too that not all solicitors are off-plan specialists.

 

The Don’ts

6) Don’t expect to ‘get rich quick’
Over the long-term property investment has outperformed all other asset classes; expect to build a sustainable, appropriately geared portfolio over a number of years.

 

7) Never ignore the basics of supply and demand
Speak to local agents to find out the specifics that apply to your chosen area. The markets for 1 bedroom flats and 4 bedroom houses do not follow the same patterns.

 

8) Don’t be influenced by your emotions
You’re not living in your investment so decorate and furnish at an appropriate level of quality. Don’t be tempted to furnish cheaply if you want to retain quality tenants.

 

9) Never be swayed by gimmicks
Be wary of incentives like ‘no money down’ deals, get rich quick schemes or developments where you are under pressure to secure the ‘deal of the day’. Never buy an off plan / new property without the guarantee of either an NHBC or Zurich 10 year warranty.

 

10) Never pay over the odds
Avoid paying finders fees, commissions or subscriptions to agents or advisors prior to completion. If the investment proposition is a sound one there should be no reason to pay up front fees.

 

Finally, remember anyone with finance in place can acquire a buy-to-let property; your aim is to buy an investment that will generate long-term wealth. With careful research and chosen appropriately, there are solid investment opportunities out there.

 

-ENDS-

 

Here are our top tips for a sound investment:

 

The Do’s

1) Research, research, research
Know the area you are buying into. Regeneration plans and new transport infrastructure are great indicators of up and coming areas and capital protection and appreciation.

 

2) Location
Apply the 10 minute rule for access to transport links, bars, restaurants, and local amenities. Consider who your ideal tenants will be, as they will be renting with a lifestyle in mind.

 

3) Buy well
Consider both price and content. Research prices in the area and look for comparables. Can white goods, flooring or furnishing be included in the purchase?

 

4) Make sure the numbers work
Most wealth is created through long term capital appreciation, so buy a property that supports this type of growth. Include all costs in your financial projections (such as legal fees, stamp duty, service charges and ground rent). Some of these monthly costs are all too often ignored leading to negative monthly cash flows.

 

5) Get the right advisors
A regulated advisor can secure the best deals free from fees and aligned to your investment strategy. Good letting agents will minimise void periods and tenants are likely to pay more rent and look after the property better if it’s professionally managed. Remember too that not all solicitors are off-plan specialists.

 

The Don’ts

6) Don’t expect to ‘get rich quick’
Over the long-term property investment has outperformed all other asset classes; expect to build a sustainable, appropriately geared portfolio over a number of years.

 

7) Never ignore the basics of supply and demand
Speak to local agents to find out the specifics that apply to your chosen area. The markets for 1 bedroom flats and 4 bedroom houses do not follow the same patterns.

 

8) Don’t be influenced by your emotions
You’re not living in your investment so decorate and furnish at an appropriate level of quality. Don’t be tempted to furnish cheaply if you want to retain quality tenants.

 

9) Never be swayed by gimmicks
Be wary of incentives like ‘no money down’ deals, get rich quick schemes or developments where you are under pressure to secure the ‘deal of the day’. Never buy an off plan / new property without the guarantee of either an NHBC or Zurich 10 year warranty.

 

10) Never pay over the odds
Avoid paying finders fees, commissions or subscriptions to agents or advisors prior to completion. If the investment proposition is a sound one there should be no reason to pay up front fees.

 

Finally, remember anyone with finance in place can acquire a buy-to-let property; your aim is to buy an investment that will generate long-term wealth. With careful research and chosen appropriately, there are solid investment opportunities out there.

 

-ENDS-

 

NOTES TO EDITOR

About Young Group

 

Young Group is shaping the Private Rented Sector through research, investment, finance and asset management. The Group’s activity spans the entire investment cycle from identifying opportunities and financing their acquisition, through to managing the asset, regularly reviewing the performance of the property holdings and advising on strategic direction, through to realising returns in the most tax efficient manner.

 

Young Group delivers day-to-day asset management through Young London, its lettings and management agency, which has won multiple awards from The Times, The Sunday Times and Bloomberg for the quality of its service.

 

Press Contact:

 

Michael Oakes

Director of Communications

Young Group

DDL:   +44 (0)20 7593 3309

Office: +44 (0)20 7593 3300

Email:  moakes@younggroup.co.uk