As the property investment industry becomes ever more complex, it can be difficult for a first-timer to take the plunge and break into the market. To help them on their way, we’ve gathered some crucial pointers from a leading North West property expert to help people in the UK understand what it takes to see success from property investment.
Joe Robertson, founder of Hidden Gem Investments, has been providing property investment consultancy for over ten years after first being introduced to the industry at the age of only ten years old via his father, Peter Robertson, a successful landlord and founder of North West estate agency Peter Anthony.
Here, he speaks to PIT to lay out his top tips when it comes to that first venture into property investment.
Buy-to-let property has been increasingly popular as a means to source further income for younger generations, with research showing that roughly 85% of Millennials agree that real estate is a good investment.
But for first-time investors looking to break into the market, it can be difficult to know where to start and how to ensure you are being tactical at every step of the process. Having insider knowledge from the get-go can be the difference between achieving an average income and gaining maximum return.
Forget Location, Location, Location, it’s Research, Research, Research
Sadly, the most time spent in the world of property investment is on the least ‘sexy’ aspect of the process: research and due diligence. The longer you spend behind your desk, the better placed you are to reap the benefits of this wonderfully lucrative asset class.
Before you embark on your first investment property, you must decide if you’d like to “flip” your property (buy, renovate, sell) or whether you would like to purchase your property and rent it out (buy-to-let). You will then need to decide on your business plan - is one property enough or is your aim to buy ten? This will help determine how best to structure your business in the most tax-efficient way.
Take the plunge
Buying property can be daunting, especially due to the fact it is likely to be the most expensive purchase you will ever make in your life. Many people think they are ready to start their property journey but can never quite manage to commit.
Common reasons against taking the plunge such as Brexit, the pandemic or awaiting a bonus often hold people back. The fact of the matter is “time in the market is far superior to timing the market”. Therefore, the sooner you take the plunge the sooner you will enjoy the fruits of your labour.
Don’t jump straight into a property flip if you’ve never renovated a house before. It would be wise to become a landlord first whilst you learn the ropes. Take advantage of tailored investment advice or appointing a property investment consultancy to find you the perfect property and project manage the refurbishment works. This guided help could help you to save thousands.
Think like a future tenant
Investing in a buy-to-let property cannot be under the same mindset as if you were purchasing a home for yourself. You must consider what your target tenant is looking for.
If you’re looking to attract young professionals or students as your tenants, be sure to think about the different amenities that will appeal to your market such as bars, restaurants and shops within walking distance of a property can often lead to high rental demand.
Don’t be afraid to walk away
Find properties that meet your criteria, then look at comparable properties and check sold prices. If you find an asking price significantly more than similar neighbouring properties, do not automatically think this is the value of the property - this is simply the asking price.
Only offer a price that suits you and never be afraid to walk away. For me personally, the ratio of properties viewed to offers accepted is approximately one to twenty-five…whilst it can be tedious, this is how to secure a significant profit when you do find the right property at the right price.
*Joe Robertson is Managing Director of Hidden Gem Investments