How to become a successful property investor: everything you need to know

There are many compelling reasons to invest in property; you’ll earn a passive income, reap the benefits of capital growth and you can utilise leverage.

In essence, property is an incredibly advantageous industry, offering endless profit-fuelled possibilities.

However, the journey to become a successful property investor can be complex, especially if you’re taking your first few steps.

Knowing what to look for in a property is a skill that really can be learned, for there are key profit indicators that can determine the success of your investment over time. From the quality of the property to legal details and essential jargon.

When you’re starting out, it’s important to make a clear plan. You have to approach your property purchases as a business to see a return on investment. Your reputation as an investor is also invaluable, so you need to maintain an equally professional, ethical communication style when you’re engaging with estate agents.

In doing so, you need to be honest and fair with your offers. This is something that you can expect to see in return from sellers; by developing a reliable reputation, you’ll make helpful connections that’ll reap endless benefits throughout your career.

As an investor, you also need to remain up to date with current affairs, educating yourself on relevant markets. Stay abreast of the laws, regulations, terminology and trends that form the basis of a property investor’s business.

The consequences of falling short here aren’t worth risking; you could lose momentum in your business or even face legal ramifications if you fail to adhere with necessary regulations. From ‘bridging finance’ to ‘beneficial shareholder’ and ‘convertible equity’, you can’t afford to get lost in estate agent terminology – familiarise yourself!

When buying a property, it’s also important to consider your tenant profile. Who are you looking to rent to? What will they need in a property? Think about the number of bathrooms and bedrooms that your tenants would need, local amenities and ultimately how much rent your target audience would be able to afford. This will strategically sway your buying decisions, leading you to the right choice each and every time.

The phrase ‘location, location, location’ is completely true! Where you purchase your property is quite possibly the most important thing. You need to consider the strength of the location, including its potential for capital growth.

You want to be certain that the location will consistently attract a reliable stream of tenants; we’ve been developing homes in Essex for years and we’ve found that areas in the outskirts of London are incredibly popular.

With an easy commute and safe communities, these homes appeal to both young professionals and growing families, making the locations more reliable.

When it comes to choosing the property itself, you also have to consider whether you’d prefer a new build, off-plan property or a refurbished home. There are lots of options available to property investors, although new builds do offer a distinct number of advantages, in many ways being considered better than older homes.

New build properties tend to be more energy-efficient, whilst they typically require fewer repairs and they’re easy to personalise.

If you’d like something incorporated into the property for the benefit of your future tenants, then you can work with your property developer to create a house that fulfils all of your requirements. If you do opt to pursue new-build properties, be sure to research who you’re working with!

There are several specific elements to a property which help to enhance its rental and resale value. Most obviously, space. The more practical space your home has to offer, the more it’ll appeal to potential tenants.

Meanwhile, you can consider your tenant’s likely checklist; is the property structurally sound, are its plumbing and heating systems working sufficiently, are the power points in good condition, how old is the roof?

By ensuring that your property adheres with all of these requirements, you’ll make a more promising investment choice. This highlights the many advantages to working alongside a property developer; you can have a say in every step of the development process, as opposed to finding faults in a preowned property.

As a property investor, it’s also important to take advice from a variety of reliable sources. Work with a property developer if you’re able to, see a mortgage broker as early as possible to find out how much money you can afford to borrow and seek advice from an investment property consultant, they’re incentivised to make you as much money as possible.

Fundamentally it’s also important to create a financial plan and remain organised. Remember that equity is your friend and consider all grants and loans that might be available to you. If you’re yet to buy a property, then you might as well take advantage of the first home owner grant and stamp duty savings which come with buying a brand-new property. Every saving you’re able to make will enhance the success of your ongoing investment property portfolio!

As you become able to expand your portfolio, make sure you buy properties which diversify your collection. Varied properties reduce your risk, so look to invest in properties of different sizes, with different designs and locations.

This way, you can trust that your properties, with different price points, will appeal to different target markets. If one performs badly then your others will protect you.

*Matthew Firth is managing director at Granville Developments