With banks and estate agents reporting big jumps in the buy-to-let market, it seems many people are returning to property as a means of investment.
Here Peter Grant, chief executive of Edinburgh-based Grant Property, reveals his top five property investment tips.
Location, location, location
One of the most important things to get right as an investor is location - buying the right location is key. Being close to universities and aspirational areas such as city centres is more desirable in the short and long term. Transport links should be considered too.
Moving on
It's important to look at the rentability or re-saleability of your potential purchase to ensure it's a sound investment. Look for high occupancy potential properties that need a makeover, as this yields a better return on investment. If you're able to bring a property up to a really high standard you can see a significant return on your investment when you come to rent it out or sell.
Think character
Focus on higher performing traditional Georgian and Victorian properties as opposed to new builds to maximise return on investment. We find that they perform far better regardless of city or location. I would always advise my clients to opt for traditional properties and look for fine period features and character. Original fireplaces, cornicing, high ceilings and floorboards all create impact and add significant value.
Buy well
Buyer confidence is back, so you need to be prepared to move fast if you want the right property, without compromising on location, character and re-saleability. Competition is fierce, so if you see somewhere that looks perfect for you the chances are it's also perfect for someone else. Be ready to snap up a bargain if you see one or employ the experts to source the best properties fast. Give yourself a bit of room for manoeuvre with regards to your offer, be prepared to give a bit more but don't be afraid to chance your arm and get a bargain either.
Move fast
In the UK, residential property continues to outperform all other asset classes over whatever period you measure. House prices in the UK have a low volatility when compared to stocks and commercial property. Having a mortgage in principal set up makes you a more attractive buyer and offers fast negotiating power so it's worth setting up an agreement with a lender ahead of looking for a property. Shop around too ; it's rare to get the best deal from the first broker you approach.
The buy-to-let market is booming just now with new lenders popping up all the time and the average deposit required is 25%. In the first quarter of 2013, the buy-to-let market burst into life when lending to landlords reached £4.2bn across 33,500 loans, according to the Council of Mortgage Lenders. By the end of March, it accounted for nearly 14% of total mortgage lending in the UK, representing a 13% increase from the last quarter of 2012.
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