Make money in any market
With media attention focused firmly on the perceived static state of the UK property market many inexperienced property investors might think that now is not a good time to buy. However, clever investors know that it is possible to make money investing in property no matter what the market does if you know what to do and what to avoid. Here’s how:
Buy smart.
Research your market so you know how to find a bargain investment property. Study the market, watch the trends, and learn as much as possible about different regions and locations. Remember the property market is different depending on which town or city you invest in or which type of property you are looking at. Look for high levels of public and private sector investment, and improved transport links such as new rail services which can add value.
Finance smart.
Check your credit and put yourself in position to qualify for the best interest rates, lowest mortgage costs, and avoid early redemption penalties. You can buy investment property with poor credit, but you will pay much more for the financing so it is worth cleaning up your credit record if possible. It maybe that your credit record still shows credit that you no longer have. Contact the credit reference agencies to obtain your credit record and make sure it is accurate. (Callcredit, Equifax and Experian)
Rent smart.
In order to achieve maximum capital growth it is often necessary to ‘feed’ the property by a small amount each month to cover a possible shortfall. This still makes good financial sense as long as you are investing for capital growth and not cash flow. In the medium to long term, if property prices still increase, these small monthly ‘top up’ payments will be a very small price to pay.
Also, make sure you attract tenants quickly. This can be done by slightly undercutting the market. Although your rental income will be slightly lower it is far preferable to have the property let than have a void period. Remember, you can always increase your rent at a later date.
Improve your property.
Raise your profit potential by making improvements. You can raise the rent or sell for higher values when tenants and home buyers fall in love with your property. Make your property irresistible with clever décor, furnishings and fittings. A well presented property will rent that bit more easily with items such as a dishwasher or DVD player.
You can profit in any property market, static or not, when you do your research, understand your location, buy smart and improve the property.