Finding a property to invest in is easy. Finding a great property with a good return isn’t as easy but it’s not impossible. You have to be smart about it and do your homework. You need to evaluate potential investment properties in order to minimise the risk of making a bad investment and maximise the profitability of any subsequent purchase deal.
Learn about the location of a property. Both the future rental value and the resale price of any investment property you decide to purchase will be heavily influenced by its location. While the age of the property is a given and its state of repair can be tweaked to a relatively minor extent, how the property’s location develops in the medium to long term could be crucial to your success as a developer.
Though some community developments cannot be predicted, careful research at micro and macro levels will reveal much about many local and regional trends. You should consider whether house prices are rising or falling locally, and to what extent. You should also consider matters such as local crime rates and future plans affecting amenities such as education and healthcare. Beyond this, there are numerous other features, such as new road systems, town planning decisions etc., with the potential to enhance or diminish the anticipated appreciation of property values.
f you wish to rent out your property as a student let, then to do well it should be within fairly easy reach of local college or university campuses. This will give you a predictable tenant turnover cycle and the common multiple occupancy arrangements should make your rental returns fairly lucrative. Nevertheless, you should also be aware of any competition from purpose-built student accommodation. And note too that some students from abroad now prefer to go for high-spec, feature-rich city-centre lets rather than lower status ‘student lets’ – which could influence the viability of your project.
You will want a professional to accompany you while you look over a potential property. This kind of initial appraisal will look for any obvious flaws which might cause you to dismiss the property, as well as identifying any minor defects which could be cheaply rectified but might be grounds for reducing your purchase offer.
At a deeper level, there may well be good grounds for arranging a detailed structural survey to protect your interests should there be any hidden defects which could represent a real risk to your investment. Though you would have to pay for such a survey, it could be money well spent to give you peace of mind. In any event, if you are arranging a mortgage to purchase the property, your lender will ask for some form of survey to protect their own financial risk.
