Jan 07, 2019
With the population of the UK increasing by record numbers year after year, the growing economy has created a bustling property market with property values steadily rising in most areas. As such, it is easy to see why so many people are interested in obtaining investment properties in the UK.
Furthermore, the government estimates that construction companies will need to build roughly 230,000 new properties to keep up with the demand for housing. However, this demand is not being met, so the rising property prices are a result of the increasing demand and slow supply.
If you are one of the many financially savvy individuals who would like to capitalise on the abundance of opportunities in this dense market, consider the following seven tips that can help you on your journey to securing your first investment property in the UK:
1. Conduct Due Diligence
The first thing you’ll want to do, before taking any other steps, is to ensure you conduct due diligence without fail. Investing in property is not something that should be taken lightly, and a lot of people who rush into decisions end up regretting them. The first part of investing involves working with an investment company who can advise you on your options. A platform like Sourced for example, which is the largest platform for property investment in the UK, can teach you how to invest, and how to invest properly. When making an investment, you’ll want to ensure you run the numbers properly, buy in a high yield area, and that the financials ensure your investment pays off in the future. Using a trusted platform will help you to do this.
2. Take Online Courses
While physical property investment schools are certainly helpful, particularity if you are studying to become a licenced estate agent, there are plenty of online courses that can be used to boost your property investment knowledge within a matter of weeks. Many paid courses are relatively affordable, and you can even find plenty of free video lessons on YouTube if you are against the idea of spending money to learn – although it would be wise to invest in your education so that you're starting out as a proficient and well-informed investor.
3. Review Success Stories
Hypothetical scenarios, guidelines, and suggestions are great, but there's nothing like a good case study, testimonial, or success story to illustrate what it takes to achieve the kind of results you're after. If you can find a strategy that is clearly working for someone else, then all you have to do is reverse engineer and emulate those techniques in your own property investment practices.
4. Find a Mentor
Following the guidance of an experienced mentor is an excellent way to avoid making novice mistakes. The downside is that a quality mentor may charge a lot for their time if you're operating on a paid consultation or tutoring basis. Alternatively, if you can befriend an estate agent or property investor, they may be willing to provide some mentorship free of charge in their spare time. Social networking sites like Facebook and Instagram are perfect for joining investment related groups and connecting with knowledgeable property investors.
5. Subscribe to Property Investment Magazines and Blogs
Every investor should make educational reading a habit to stay informed with the latest trends in the market. Browsing through the latest headlines can help you stumble upon interesting opportunities that you probably would have overlooked otherwise. Fortunately, it's easy to find huge lists of property and investment blogs that are worth following, such as this mega list of 75 blogs from Feedspot.
6. Consult with an Estate Agent
If you are new to the game, it would be best to stay in close communication with your estate agent when you're shopping for your first investment property in the UK. Having a go-to agent who you know and trust will help streamline the process of making offers, negotiating deals, and performing other tasks related to the purchase and sale of properties.
7. Start with a Single-Family Home
While it may be tempting to start with a large commercial property or multi-family residence, it may be better starting small with a single-family home just to get the hang of it without taking too much risk. After all, you don't want to be staking too much on your very first property purchase. A good rule of thumb is to calculate what you can afford to spend to secure a property, and then try to spend half that amount. Giving yourself plenty of headroom is the best move in the beginning because you can always scale up with a larger purchase once you're completely confident in your processes.
Always Estimate Return on Investment (ROI)
Regardless of which strategy you choose to start with, it is best to approach any investment by holding ROI as the highest priority. In property investment, it can be easy to get side-tracked by aesthetic features, personal preferences, wishful aspirations, speculation, and other forms of hype that can distract you from the bottom line.