The property market is booming, and it can be extremely tempting for people on the sidelines to make the jump and start building their own portfolio of properties. It is, however, important that you do not jump in blind, and first, take some time to understand the market, how it works, and what steps you can take to make money. Investing in property is an excellent way to build your wealth, but only if you make a good investment and make more money than you spent.
If you are thinking of investing in property, here are some top factors to consider if it is the right move for you.
Research the market
The market can be difficult to navigate if you are new to purchasing a property. Although the potential in the UK to make a good investment and make a profit from a property is high, you still need to consider the market, for your best chance at success. You should look out for low-interest rates, seasonal patterns, world events, and previous market patterns. This will help you to determine the best time to buy, and when you should consider selling. You should keep this information updated, and make a plan to follow. Your plan should stay adaptable, as you never know what may prop up. For example, no one could have predicted the COVID-19 pandemic and the impact it had on the housing market. You should make sure you are prepared for all scenarios.
Type of property
The type of property you invest in will dictate the value and profit you make. You should first consider how much time and budget you have, as you may need to work on one project at a time and slowly build it from the ground up. This personal information will inform your next steps. To learn more, you should research your options, for example, how to find land to build a house, and buy-to-let mortgage offers. The type of property will impact the time you have to spend on the investment, for example, if you choose to build a property, renovate a property, or purchase a property ready to be used.
The type of property will also matter, as you may choose to buy properties to rent, or buy properties to renovate and sell.
You will need to ensure you have the money to invest in the properties. The amount of money you have will need to cover a variety of aspects. If you are purchasing a property that is ready to be occupied, then it is likely you will just need to finance the deposit, the legal and estate agent fees, surveys, valuations, land registry, stamp duty land tax, mortgage payments and a safety net to cover ongoing running costs while you try to get the house occupied.
However, if you are building or renovating a property, you will need to consider all of the above, as well as contractors, materials, time, licenses, permits, and much more.
Investing in a property is a risk. Make sure you take steps to reduce risks and increase your chances of success.