Here Are Some Questions to Consider Before You Buy an Investment Property.
If you’re looking for cheap investment properties In Manchester Leeds Birmingham Yorkshire or somewhere else then you’re probably familiar with trawling through endless similar looking houses for sale on Rightmove and Zoopla for hours. But how do you find a great property deal if they all look the same? Here are a few things to consider when looking for investment properties.
1: Does This Property Fit In With My Investing Strategy?
This fundamental question makes sure that you always keep your investing criteria in mind before you buy a property. It’s easy to get pulled off course or distracted by TV programmes, the latest property investing strategy promoted by property gurus, or the “next big thing in property” emails clogging up your inbox. It’s important to remember what you’re actually buying property for.
Are you buying a property for the cash flow each month? Then you’ll want properties you can rent out for more than it costs you to keep them. Are you looking to fix up and flip the property? Then you’ll want properties in need of a refurb. Simple really. No need to over complicate it. Focus on what you’re actually looking for and ignore the rest.
Think about the the eventual exit strategy you have in mind and make sure that the investment property you’re looking at will fit that strategy.
2: Is It a Below Market Value Property?
This is something that a lot of newer investors can become obsessed with. Considering the price of the property compared to the ‘potential’ market value of the property. If you can get a property below market value, great. You are ensuring that you are getting some “built-in” equity when you buy it. (Normally a good thing).
However, in the current property market, below market value deals are few and far between. They are still out there, but there are a lot of people looking for them, and that in itself acts to push up the price. It may be more useful to look at the return on investment, and if this property delivers the result you would like to get. If it does, then great. That’s what you’re looking for isn’t it?
Waiting for the perfect below market value deal may mean waiting a long time without actually investing in anything. You may miss out on some good deals that would have been ideal for you had you not been solely focussed on finding the “perfect deal”.
When you’re considering a property investment, what do you want it to do for you? Are you looking to get a better return than you’re getting at the moment from keeping your money in the bank?
If the property in question does provide a better return, is that enough? If it is, then great. Don’t get caught up in “analysis paralysis” where you spend so much time going over the numbers a hundred times and trying to find something better that you lose the property to someone else and have to start again.
At Cheap Investment Properties we specialise in finding properties for investors. Investment properties in Manchester Leeds Birmingham and the North of England.
3: Have You Got Your Stuff in Order?
Have you spoken to a mortgage broker or your bank. Can you get the funds to buy this property? Is your credit file up to date? Do you have the deposit? Can you provide proof of funds to a property seller or estate agent to show them you are a serious buyer? When you find a suitable property, can you move quickly to secure it before someone else does? Having your stuff in order will allow you to act quickly when that ideal property does come up.
4: What Will It Take To Get This Property Ready To Profit?
This is an important but often overlooked question. Some investors will go out and buy a run-down property at an auction because the price is low… only to realise later that they’re going to have to spend a lot of money to get the property ready to rent or sell.
How long will it take before you start making money? If it will take months to get it ready, don’t forget to include your holding costs on top of the refurb budget. Mortgage payments, utilities, council tax etc. You don’t want to run out of money before the refurb is finished.
Obviously there is more to it than this but these are a few important considerations that sometimes get overlooked by inexperienced investors.
If you feel overwhelmed by the thought of looking at a hundred properties, making offers to sellers, dealing with estate agents, going on viewings and everything else you need to do, you don’t have to do it alone.
We specialise in finding properties for investors. Investment properties in Birmingham Manchester Leeds and the North of England that are attractively priced and fit the investing criteria of the investor.
We’ll do all the searching, analysing and offers for you and then send you the details when we find a property that matched what you are looking for.