Investing in property can be a daunting experience. It is an exciting venture nonetheless, but one that should be entered into with a fair degree of caution. Some developers and salespeople can sweet-talk and lure you into purchasing a property that is not as profitable as you would like. Some people make rash decisions when it comes to investing in property and come out with costly mistakes. Do not be too trusting, and do your own research.
Admittedly for most people, property investment is confusing. Property investment is often associated with the stigma of being risky and with many pitfalls. Nothing could be farther from the truth. It is hardly surprising that once property concepts are grasped – and it is easier than you think to do so – you could be well on your way to confidently investing in property.
The first thing you need to be is a discerning investor. Come armed with research and know the right questions to ask. Of course, the first thing you must know about the property is the reasonability of the price. It is not enough that the price of the property you are eyeing fits your budget. The more important question is if the property is properly priced according to fair market value. It is important to research the prices of similarly situated properties to assess the market. If you are purchasing a property as an investment or to make a profit, compute the yield you will most likely obtain. For buy-to-let investment, make sure that the rental income is enough to cover the mortgage. Finally, choose your location well. As with all property investments, location is the clinching point. Choose areas that are up-and-coming or developing, as property values in these places are most likely to increase as well.
Property in the United Kingdom is very much a promising and viable investment. A quick look at the population trend of the UK shows us why. The UK population is consistently on the rise and is projected to reach over 62 million in the next ten years. This trend is attributed to the fact that people are living much longer due to improved health care, less pollution, better working conditions and higher standards of living. Most of this growth is concentrated in the progressive part of south-east England.
Immigration has also dramatically altered the areas where population is concentrated, and thus where demands for properties, houses and rentals is greatest. For example, as the very populous baby boomers reach retirement age and prefer to move out of the bustling cities, suburbs, leisure areas and properties close to the sea or mountains is on the rise. Generally, baby boomers prefer quiet spots close to the city, as they still want to maintain close ties with family and friends. Another factor you might want to look into is regeneration areas. Some parts of Northern England, for example, are fast becoming hot property areas due to improved infrastructure, retail establishments and commuter lines in the area.
Because of these demographic and socio-economic shifts, property investment strategies also change. With some parts of the UK fast becoming up-and-coming property hotspots, it would be a good idea to get ahead of the rest and purchase an investment property below market value in these areas.