Making a property purchase could see big returns, but what, where and why should you buy?

Invest in Property

Investing in property means spending a big chunk of your money that will be tied up for some time, and there’s no guarantee you’re going to make a return.

Yet some experts, such as Ian Samuels, author of Property Tycoon: A Simple Seven Step Guide to Becoming a Property Millionaire, are saying that now is a great time to buy property, as prices won’t be this low again and you’ll be able to reap the benefits of a property boom that he expects will come between 2018 and 2020.

 

Should I Invest in Property?

In the UK it’s almost considered a law now that if you invest in property you will make money.

This isn’t necessarily so and, even if prices do go up (as they are likely to in the long-term), it’s still not necessarily the right move for you. Property is an “illiquid” investment, meaning that your money is tied up for some time and, unlike some forms of investing such as stocks and shares, it can take a while to sell your asset and access your money.

Equally, if you rent it out for a while, it’ll take time and effort to manage it, as well as potentially landing you with costly payouts, including repairs and inspections. You may even have to fork out to extend the lease. If you’re buying to let, you’ll need to make sure you’re able to cover the cost of your mortgage payments if you don’t find tenants for a few months.

 

Flip a house or buy to let?

Ian Samuels recommends that if you want to make the most money from your property, you should be buying to let. House flipping (buying a rundown house, doing it up and selling it on at a higher price) is harder and more expensive than you might think.

Even if you make a quick burst of money, buying to let is likely to be the most profitable in the long term. This is particularly true when you consider the cost of capital-gains tax for each time you sold a property. Plus, when the time comes to sell the property you’ve been renting out, you may be entitled to letting relief on your capital-gains tax.

 

Where should I buy?

Ian Samuels recommends investing in properties in the North and the Midlands. Properties in these areas have potential to be bought at a good price—one that will steadily increase in value in line with most of the properties in the country. Many of the foreign investors who have owned properties in London are now viewing the capital as too expensive, and are looking to the Midlands and the north of the country for their future investments.

Of course, you’ll need to consider the potential problems if you live a great distance from where you buy your property—not least the difficulty in managing a property that’s difficult for you to get to. Try to buy somewhere that’s easily accessible from where you live but still has growth potential.

 

What kind of property?

Consider investing in a two-bedroom flat if you’re planning to rent it out. Generally it’s better not to have a garden attached to a rental property as it just means extra work for you. Renters don’t usually want to look after a garden and it can start to look messy very quickly.

If you’re simply looking to sell on, then a three-bedroom semi-detached house is a wise buy.

Read more articles by Jasmine Birtles here

Related Posts