Are you looking to renovate and sell, renovate and hold or a mixture of both? Your strategy will dictate the type of property investment you keep an eye out for and also the type of lending you may look at, (more on lending in point 5 below).
The strategy you decide on will influence the area you look to buy in. If you are looking at building a sustainable portfolio your area may be different from the one you decide on to flip properties.
Perhaps the most important place to start is the area you are going to specialise in. At Fresh Invest we source properties in a handful of select locations and only manage this because of the network of sourcers we depend on.
If we were to look at the whole of the UK we would need an army of sourcers to provide the level of quality we depend on.
Buy to Let investors that want to source for themselves should analyse their local area and then select a location they believe has merit. Being location specific means you can monitor prices and react immediately when an opportunity arises.
A recent feature on rightmove allows you to draw a line around your search area and set up an alert based on a property type/price etc.. I run countless versions of this and it really does help you respond to opportunities quickly.
Something we have always prided ourselves on at Fresh Invest. Due diligence is not something to take lightly.
We live in a technological age with huge amounts of information at our fingertips. Below I list a few websites which help us when conducting due diligence on new areas:
1. Rightmove – For checking sale and rental values and also previously sold prices rightmove is invaluable. As previously mentioned, you can also set up new property alerts.
2. Primelocation – I only use this for its search term box, if I am looking for a specific investment you can use the search term to narrow down your results. For example, if you want to buy a house with planning, simply type planning into the search box along with your desired area.
3. Findahood – This website gives area statistics like area specific household income, occupations, living arrangements etc. Use this to check the area you are looking to invest in lives up o expectations.
4. Googlemaps – If you are looking for development opportunities when a satellite search may yield some results for land with planning potential.
5. Local Council websites – Check your local council site for planning policies. Each council needs to submit a local plan to the government showing the areas it believes can be developed to keep up with housing demand. A good knowledge of this will help decide on the right area to invest.
6. Council Planning Portals – Many planning portals can be searched using terms like “house of multiple occupancy” “student” etc.. If these are areas you are looking to focus on its good to know what your competitors are doing..
7. Land Registry Portal – Something I have found invaluable if you are a proactive investor/developer. Land
One of the biggest mistakes new buy to let investors make is not taking into account the costs attributed to running an investment property.
Service charges, ground rents, council tax, income tax and void periods are all things that need to be considered when looking at your net position from an investment.
I see so many instances of investment companies offering a “gross yield”. Work your figures on what your “net” (take home) amount is.
Depending on the type of buy to let you look at will depend on the Net yield you should be looking for. Typically I work my yields on a sliding scale up from London at 6%. South East at 7%, South West 7-7.5%, Midlands 8%, North West 9%, North East 10%. If your net return is at those levels your in the game.
To successfully invest in property you need to be in receipt of all the facts. To do this you will need to speak to people that can give you this guidance.
A good mortgage broker is worth every penny, they can give you guidance on suitable mortgage whilst taking into account your long-term strategy. Up front fee’s, early redemption penalties and the type of vehicle you are buying your property in will all have a bearing on the best mortgage for you. A good broker can give you that advice.
If you are looking to build a portfolio it may also be worth talking to a good tax specialist, they will outline the pro’s and con’s of investing through a company and also may give you a facility to use for all of your bookkeeping.
Its no secret that people buy from people and being top of your local estate agents go to list when an opportunity arises is worth its weight in gold.
Develop relationships with the top agents in your areas, explain clearly what you are after, your budget and timescales. Most importantly keep in touch with them; some may only take you seriously when they have seen you can perform but those relationships could be the base you build your portfolio from.
Whether it’s for development or investment, spotting an opportunity and knocking on doors is often the best way to pick up those bargains before they hit the market. If the owner isn’t available I often use land registry to find them before getting in touch. Land registry should give you an address for them.
It is also worth writing and printing some letters to drop through doors of properties you may come across.
Don’t be afraid to break boundaries.
Finding your niche will enable you to steal a march on your competitors. This can be by your ability to knock on doors, it can be the type of property investment you look for or the level of quality you put into your buy to lets.
We recently met a developer that builds student accommodation out of old shipping containers, a great idea and one that has enabled him to build a really profitable portfolio quickly.
Last year we build a block of student studio apartments in an area that had never seen them before; we were told there would be no demand but a year on they are our best performing property investment with a waiting list of students.
If you find a niche, hold true to your convictions and make it work.
Over 14 years we have continually refined the way we find investment properties. We have access to exclusive off market investments that have undergone our rigorous due diligence process.
If you are interested in seeing how we can help you, contact us today using the details in the footer.Back to news