Property Investment Checklist
It is critical that landlords are clear what they are getting into before finding an investment property and making a costly investment mistake.
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Here’s a property investment checklist that might help new landlords making a new property investment:
- Property investment has always been a great long-term investment but understand there are risks and the value of property can go down as well as up.
- Landlords should generally avoid property investment clubs and certainly paying large membership fees.
- A landlord should remember that finding investment property is not like buying a home. Investors should focus on the likely returns from the investment when deciding on which one to buy.
- An investor should carry out a full investment appraisal and calculate their investment property returns.
- Landlords need to be clear about what type of tenants they want to attract, identyfing their customer, before finding a buy-to-let (BTL) property.
- Consider all the potential avenues to tracking down a property, be pro-active and use the latest internet sites to obtain information and details of potential properties.
- Landlords should consider buying a BMV property. BMV properties can be found at property auctions. Landlords need to be careful that they are not caught out by the provisions of the 1986 Insolvency Act when buying a BMV property.
- Landlords buying off plan should ensure that they are really getting a discount if they have been promised one by the developer. The best way to do this is to check out the local property information to find out if the investment property bargain that they have been made to believe.
- Property investors need to have decided on what type and period of property to buy. This is going to be one that appeals to the needs of the type of tenant they are targeting and also be able to achieve a landlords long-term investment returns.
- Once a landlord has found a potential investment property they need to negotiate hard to secure a good deal. Remember the adage that a property investor makes their profit when they buy not when they sell. Always view as many potential investment properties as possible and put in low offers for any that might meet a landlord’s investment criteria. That way one or two might be accepted and a landlord can then make their ultimate investment decisions based on these offers.
- A landlord should ensure that they obtain the best buy-to-let mortgage advice and products to ensure that they cut financing costs to the minimum for the duration of the investment. This generally means avoiding expensive one off charges and fees and ensuring that landlords source buy-to-let mortgages with the lowest APR (Average Percentage Rate).
- A landlord should ensure that they understand fully what they need to do to let out their investment property and also the responsibilities they have in letting out their property and the regulations that govern the letting of residential property.
- Landlords employ all the ways that they can to cut their costs in order to maximise their returns. These include managing their property themselves and also ensuring where possible that the investment property remains let thereby avoiding the curse of the rental void!
- One of the key ways a landlord can maximise their returns is to find techniques that minimise the amount of tax they pay on their investment property.
- Finally a property investor should always remember the 3 PILLARS OF BUY-TO-LET if they are going to end up with an investment that will maximum their returns and meet their long-term investment goals.