28 Feb Property investment: the things no-one tells you
Property investment is fun, it’s lucrative and can be hugely rewarding. But it’s not without a few challenges along the way. While that doesn’t mean that you shouldn’t consider it, it does mean you need to be prepared. So, for this reason, we’re shedding light on the things that no-one tells you and giving you some much-needed property investment advice…
Expect the unexpected
From void periods to fluctuating income, being a landlord is a great investment but you can’t expect to have the same money collected each month. Despite your best intentions, you’ll probably have some months without tenants. And, when you do have tenants, monthly income can vary thanks to bills and any other fees. If you’ve had to repair something in the property or fork out for a new washing machine for example, this will also have an impact on your money. There is an easy solution to this though and it’s to try and keep an account for spare cash. That way, when you do have a month like this, you won’t be out of pocket.
It can take time
You might only want one or two properties but if you want to build up a property portfolio, it’s important to remember that this isn’t going to be achieved overnight. Finding the property, searching for tenants and even all of the paperwork needs to be done carefully and with precision – but a reputable letting agent will be able to help with this. Once more, if you’re looking to invest and then sell a property, it can be wise to sit on it for a few years – depending on the market condition.
Similar to the above point, when you’re first starting out, it’s wise to start as small as possible. For example, if you invest everything you have, you won’t have anything else to play around with – and there’s more risks associated when you don’t have anything to fall back on. By starting small, we mean with one property and by going to auctions and speaking to local agents to find the cheapest properties in your desired area. While the property may require some work, there’s a higher chance of selling it for more and coming away with a better percentage overall. The majority of property investment profits come from renovations so it’s important to bear this in mind when it comes to initial budgets too.
Really look at your finances
In the same way that we tell first-time buyers to scrutinise their finances, we also advise investors to do the same. There’s no shame in leaving a property purchase until the following year if you’re going to be in a better position. It’s hugely important that you carry out due diligence of your numbers and lean on a recommended financial advisor and mortgage advisor. Without their support, it can be difficult to navigate your options and make the best decision.
Treat it like a business
Ultimately the best property investors are the ones who treat it exactly like a business. Put simply, you get out of it what you put in. As mentioned above, you need time, an expert team to help you and an awareness and understanding that it’s not always going to be plain sailing.
At Kaytons, we support both new and existing investors in Manchester and you could be next. As well as having years of experience in the northern property market, we also have plenty of properties that are ideal for investors and can recommend a few external teams to assist with the financial side. For more information, drop us a message or pop into our Chapel Street office to get the ball rolling.