Want to invest in property but concerned about the risk? No investment is without risk — but when it comes to property, there are a number of things you can do to reduce that risk. A little time, thought and research can make a world of difference.
Firstly, don’t pay over the odds for your property. The best thing you can do to reduce the risk of paying too much is to do your research first. If you’re considering a property, look at what similar properties in the road have sold for recently. Check online using the many property websites available to find out what is a reasonable price for the area.
Also, consider if there is an existing rental market in the area. Are there already houses in the road being rented out? When properties are advertised to rent are tenants found quickly or are there empty houses in the street? Also, look into taking out a rent guarantee insurance policy, or for tenants whose rent would be guaranteed, or an agency that will guarantee your rental income (there are some).
Give careful thought to your choice of location and the sort of tenant you hope to attract. Is there a steady stream of students renting houses in the area or a lot of young professionals?
Try to get a feel for the area, visit www.police.co.uk to check out reported crime and have at look at local newspaper websites to see if there are any issues affecting the area.
Give a thought to any recent or planned investment projects in the area. Have any recent projects such as infrastructure projects improved the area, or are there any confirmed projects in the pipeline? Consider the effect that projects such as the Jubilee line extension and now Crossrail have had on the value of property in the areas they’ve benefitted. Conversely, give thought to any projects planned that might adversely affect the area.
When it comes to the conveyancing process, give careful thought to your choice of solicitor. Read reviews, ask for recommendations (specific names, not just firms) and see if there are any names that keep cropping up. Choose a rigorous solicitor to do your conveyancing who will leave no stone unturned and don’t rush the process, it’s there for a reason — to protect you. This is always important, but all the more so if you are a cash buyer, and there is no mortgage company undertaking checks.
Shop around for insurance and specifically talk to a local independent company that knows the area well — as they are sure to know of any issues affecting the area. Be very wary of investing in a property if the insurance is much higher than you would expect — it will be so for a reason.
So, if you are going to invest in Property, there are a few things you should consider before committing to a property. But take a little time and do your research and it can help to make your property investment as robust as possible.
After all, if investing directly in property doesn’t appeal to you, then consider trusting a multi-asset investment company to do it for you. Again, do your research and ensure the company you choose is reputable, contactable and delivers a consistently good performance.