A Guide to Help You in Invest in Property

Buying another property as an investment has come under a lot of scrutiny recently. Ethical concerns are being voiced surrounding the housing shortage, and the extra stamp duty and tax incentive crackdown are making investors think twice; but there are many people who are still keen to use property as an investment in this time of low-interest rates and unpredictable stock markets in response to the current political landscape.

Whether you have received an inheritance, redundancy or lived a frugal lifestyle to pull together a deposit for an investment property, the chances are high that Netflix has been swapped for Rightmove as you try and find a property that will provide you with a high return on your investment. Here are 3 key considerations to help you become a successful investor in property.

Research other options
Are you sure that this is the right way for you to invest your money? Have you researched other areas to invest in? An investment in shares or an investment trust like an ISA will mean that you escape tax on the income you make, and get capital growth tax free. You also have the ability to access the cash quickly if your circumstances change. You need to recognise that property is a long-term investment.

You need to locate an area that is up and coming, or likely to be improved in the future that will appeal to potential tenants. Identify whether there are any planned transport links, are the schools good in the area? Are there universities or hospitals in the area that you are scouting? These points may feel very obvious to ask, but their importance cannot be underplayed: you need to match your budget, property, and services to the location that you are looking at.

Typically, people invest in their local areas because this is the market that they know, and they will be able to deal with the management of the property with ease. However, it is worth looking out of your area, you may just find a property that will give you a higher rate of return on your investment. For example, the high-speed Javelin train from St. Pancras to Ashford only takes under 40 minutes, which has meant that Kent is now ripe for property investors: the Medway towns, Ramsgate and Margate are now more attractive to commuters. Technology enables Conveyancing Solicitors in Kent to complete the sale without the need for you to physically go to the office.

Rental Yield

Remember that this house is not for you to live in, and it does not have to appeal to your tastes and sensibilities. You need to have a clear idea of who the ideal tenant is going to be. Your main concern is the rental yield. The rental yield is the annual income return divided by the costs associated with the property (including insurance, maintenance and repairs), and it is expressed as a percentage. The higher the rental yield percentage, the better the investment. The rental yield needs to be what you focus on, and what you do your uppermost to control to become successful.

Karl Young

Part-time daddy and lifestyle blogger. Father of 2 boys under 2. Golfer, scare-fan, tea-lover, traveller, squash and poker player. I write on the @HuffPostUK http://www.huffingtonpost.co.uk/karl-young/

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