Research, Research, Research ….. can make all the difference to your success. That said, there is something I want you to bear in mind when doing your homework, and that is this – there is no such thing as the perfect property!
There are many things you should consider, and I will write about the fundamentals in a minute, but you will find that you will probably have to make compromises. You will have to decide which areas are not as important to your success of the investment as others. This will become clearer later.
Ok, so what should you consider when researching investment properties? Here’s what I do, with some questions I ask myself (in no particular order):
1. Employment – Are there big business’s and public services nearby e.g. supermarkets, hospitals, universities?
2. Transport Links – How far away is the nearest bus stop and train station?
3. Schools – How far are the nearest schools and what grades have they received on their Ofsted reports?
4. Rental Demand – Check if there is a demand for the area and type of property you are looking to buy, by looking online and talking to letting agents.
5. Regeneration – Are there signs of other private investors or the local authority investing money in the immediate area?
6. Parking – Not critical but is good to have. Not having parking can put some people off.
7. Price – Are the vendors asking a realistic price compared to other recent sales?
8. Market Growth – Do you expect to see growth in the short to mid term based on previous sales?
If you are looking to invest in a flat/apartment, there are a couple of additional areas you should check too:
9. Lease – How many years are left on the lease? This will affect the value as it will cost you more to extend the lease.
10. Ground Rent & Service Charge – How much? This will affect your ROI as it’s another bill to be deducted from your rental income.
Have you noticed that 9 of these points can be researched at home before you consider arranging any viewings? Thanks to the telephone and the wonderful ‘world wide web’, you would only need to visit the area to check point 5.
Now here is a plain example of why I said there is no such thing as the perfect property – If you like the idea of renting to young professionals you will not necessarily want a property that’s located next to good schools, but would rather a location closer to big business’s. Although it would be great to buy near big business’s and good schools, you may find this hard to achieve. This is just an example of a compromise you may have to consider.
If you have any thoughts or questions about research, please leave a comment below. Thanks.