When done the right way, property investment can be a fantastic way to grow your income and gain more financial security, setting you up for a more lucrative future. At the same time, however, investing in the property market can be a risky venture to undertake, especially without the right prior research and preparation. If you’re considering buying your first investment property but feeling cautious, find out about the best steps to take and the most essential qualities you should have to succeed in the buy to let market.
There’s a reason the UK property market is attracting so much attention. With strong demand for rental property and predictions that UK house prices will increase by 15% come 2023, there’s plenty of potential for those who wish to get their foot on the investment property ladder. The north-west, in particular, is an area with the highest potential for buy to let investors, with predicted house price growth of 21.6% and some of the UK’s highest rates of demand. In both Liverpool and Manchester, demand for rental property is outstripping supply, with more and more people choosing to live in the centre of each city. In Manchester, around 10,000 people lived in the city in 2000, a figure which had grown to 50,000 by 2016 and is expected to reach heights of 80,000 by 2024. These rates of demand have led Manchester properties to generate some competitive rental yields of 5.55% on average — a far cry from London’s average yield of just 3.05%. Liverpool is another city with strong investment prospects, boasting average yields of 5.05% and the fastest growing city centre population.
The significance of these regional differences makes it clear that in order to succeed in UK buy to let, it’s important to be selective on where you choose to make your investment. However, this isn’t the only thing that can make or break your investment. There are a number of skills and qualities that are beneficial to those investing in property. Successful property investors understand the market and the economy, keeping on top of any changes that may affect their investment efforts. They’re good with money and managing their finances, they have good management and communications skills, and really understand their tenant.
Before making your first investment, be sure to think about whether or not you possess these skills. If not, it’s worth looking into finding someone to help you, such as hiring a financial advisor. Whatever your knowledge and experience, it’s always essential to find a reliable investment company to work with such as RW Invest, who have a strong reputation within the UK property market. Spend time thoroughly researching the property market, weighing up the pros and cons of each property type and the best tenant to target. Think about whether you’re willing to accept the inevitable risks that can occur within the property market, such as a fluctuating economy or unpredictable tenants. If you don’t feel confident that you’ll meet your financial goals, or you don’t fully understand market behaviour, it might be worth doing some market research beforehand and seeing how you feel.