4 Tips for People Starting Out In Property

If you’re looking for ways to store and grow your wealth, then investing in property might be a tantalising prospect. In the UK, house prices have been consistently rising above inflation for several decades. Despite recent reversals, the long-term trend looks quite resilient.

But if you’re looking to get into this market, there are a number of simple tips, and pieces of advice, that are worth following. Let’s consider a few of the more important ones.

Clarify your investment strategy and exit plan

What is it that you hope to accomplish by entering the property market? How are you going to get out of it, once your goals have been met?

If you don’t have good answers to these questions, you risk investing aimlessly. This can lead you to make costly mistakes, and to end up stuck with assets that don’t match your objectives. Are you going to be earning money through buy-to-let, or through rapid house flipping? Under what circumstances are you going to sell?

Thinking about these questions ahead of time will allow you to think clearly, and act decisively, when the time arrives.

Calculate rental yields to assess profitability

It’s also worth contemplating exactly how much passive income you’ll be able to generate from your investments. It’s possible to come up with a reasonably accurate forecast, which factors in costs like stamp duty, void periods, and administration.

Come up with a shortlist of prospective purchases, and run each of them through a rental yield calculator. This will help you to prioritise the investments that will provide the most value in the long term.

Choose your ideal tenant profile early on

What kinds of tenant do you hope to attract? The answer may depend on the location of the property in question, and the features that it offers. What’s right for a family might not be appropriate for students. The former might look for lots of garden space, while the latter might want easy access to the local university.

When you understand who your target market is, you can start to make informed adjustments to the property you’re offering. To satisfy retirees, for example, you might look for properties that are easy to get around, and that come with minimal stairs.

Stay informed on taxes, regulations & financing

We’ve already mentioned a recent downturn in the housing market, which largely resulted from changes to Stamp Duty that came about in April. Landlords might also watch developments in EPC requirements, and the upcoming Renters’ Rights Bill, which aims to make so-called ‘no-fault’ evictions illegal. These changes might drive down the profits you can make from your property portfolio, and ultimately make certain investments unviable.

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