4 Considerations for Your First Property Investment

January 1, 2021 7:48 am

Investing in residential property is a big step for first time investors - but a very exciting one to take. As you know, investing in property brings a multitude of benefits and opportunities, however, being aware of the risks as well as the opportunities is vital.


That is why it is especially important to ensure you do it right.


Over the years we have found there are 4 key considerations to make when first starting out on your investment path. Our blog outlines these considerations.



Plan



It can be tempting to dive in and take the first deal offered to you to get the ball rolling on your property journey, however, try to refrain.


Like anything, planning is essential. Without a plan you risk doing it wrong. By setting out a clear plan you can map out your objectives and envision a path of how to get there.


This will help you outline which properties are right for you and your portfolio, making the process easier for all parties.


Bare in mind, not all properties available will fit the bill. The ultimate goal of a property investor is to find a property you can add value to, but it is essential you avoid selecting a property that is beyond repair.


If there is no potential profit then stay away otherwise you put meeting your objectives at risk.



Research



Be diligent. Along with planning, research is equally important in making sure considered properties fit your objectives.


Before considering properties, research and outline the current market and if these properties will perform well - making an ideal addition to your portfolio.


Whilst researching the market, analyse which properties are on offer and their location.


The location of a property is as important as factors concerning the property itself. A property’s location contributes greatly to its selling/ rental prospects. Consider the transport links, local schools and access to shopping and leisure facilities.


This will allow you to determine which tenants will be suitable for the property, allowing you to effectively move onto our next step.



Budget



By outlining your budget you can effectively dedicate funds and prioritise your spending. Do your sums.


Analyse properties within your budget and determine the ROI on these properties - a property’s failure to offer a solid yield means there is no sense investing in said property.


A strong budget will involve factoring in maintenance costs, unexpected circumstances etc. With this you can confidently invest in your chosen property.






Team



Think about your team. You want to work with people who prioritise your property investment in the same regard you do. Continue your research by researching potential property sourcing companies to guide you on your investment.


The property industry is one with great networking opportunities allowing you to connect with experienced investors from around the world. Through networking in the property industry you will gain key knowledge from the experiences and learnings of others.



Conclusion



 Residential property investment is completely worthwhile for those looking to gain a side income or increase their capital.


Property investment, however, is a decision that takes precise planning and careful consideration before commitment. Consequently, this makes it vitally important to perform your own due diligence before making an investment.


Performing due diligence will highlight areas of consideration, while allowing you to prepare for future occurrences.


Performing due diligence will also involve taking your budget into account. Being financially wise with your budget is essential. There is prevalent risk of over or under spending your budget.


Underspending on your budget can be as much of a hazard as overspending. Ensure to buy quality, otherwise repairs and replacements may come around sooner than anticipated.


Meanwhile, spend what you need to - you are looking to add value to make a profit, not a loss.


Offering great networking opportunities, the property industry is loaded with people who can advise you and steer you on the right path. This will help lead you to the road for success. Disclaimer: This is information based on our knowledge gained throughout years of experience, education and learnings. This information is open to interpretation, therefore, you must carry out your own due diligence regarding the subject.

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