Leading property investment experts Redmayne Smith offers advice to new investors

With rental demand at an all-time high, research from Aviva has revealed that due to the current cost of living crisis, almost one million people are switching to rental properties as opposed to becoming a first-time buyer.

The ability to access good deals by buying into developments like off-plan properties, along with providing multiple income streams from both long and short-term tenancies, is influencing many to explore avenues of investing in residential property.

Here, leading property investors offer their words of wisdom as to how new investors can begin their investment journey and ensure a successful return of investment.

1. Conduct your research

Firstly, it’s important to have an understanding of what property investment consists of. Property investment is a method to buy or invest in residential or commercial property or developments and generate rental income. It also allows investors to own assets that can be leveraged to create revenue streams or profit from selling the asset itself.  No special training or licensing is required to buy and rent property, meaning almost anyone can start building their portfolio.

Emma Howitt, Redmayne Smith said: “The wrong property can make or break an investor’s portfolio, so my biggest piece of advice for new investors is to conduct thorough due diligence. It doesn’t matter how nice your property looks if it is an area without decent capital growth or high rental demand. Before you buy, research top line information from UK House Price Index, JLL news and Savills, as well as looking at current and future investment plans in the town/city – regeneration equals growth.”

2. Prime Locations

With hundreds of locations to choose from, selecting the right area is key to ensuring you will see the greatest return for your investment.

Curtis Congreve, Head of Investments at Redmayne Smith, said: “We’re seeing huge uptake in investors wanting major cities outside of London, which are far overtaking the demand for investment opportunities in smaller commuter towns. 80% of staff are able to complete work remotely and hybrid working has become an instant for many, lessening the residencies held in London.

“We are focusing our investment opportunities on cities that are seeing huge investment and regeneration, knowing that they will show the greatest returns for our clients. Our most popular areas for investors right now are Birmingham, Liverpool and Manchester – all of which provide more for your money, thus attracting big businesses and a captive audience of young professional renters. Choosing these locations is paying off: one of our Manchester developments, for example, has a waiting list of 2,000 tenants and Birmingham rents have risen by 19%.”

3. Planning ahead

Planning ahead can be tough, but it’s vital to ensure you can keep your tenants happy.

Abi Hookway, Managing Director of Redmayne Smith, comments: “One of the biggest mistakes made by amateur property investors is not planning ahead for predictable costs, like the upkeep of homes. Personally, I put away 10% of my income every month to ensure that my tenants live in good quality homes. This has provided me with loyal-long-term tenants – earlier this year, I had to raise my rents and didn’t receive a single complaint.”

It’s also important to keep up to date with ongoing legislation changes to ensure your investment isn’t affected. Back in December 2020, the government announced new standards for rental EPC ratings, requiring a rating of ‘C’ or above. The changes have been made to help make homes much more energy efficient and will apply to all tenancies from 2025.

“Future landlords need to plan ahead for the upcoming changes to EPC ratings,” added Abi Hookway. “Following this announcement, I would strongly suggest new investors explore investing in new build or off-plan properties.”

Making the right move at the right time makes all the difference, and having the correct knowledge allows investors to make financially sound purchases.