Posts Tagged ‘property investment’

There are pros and cons involved in buying any type of property and it’s always important to weigh up all the issues before you part with your hard earned cash. Old build property, new build and off plan properties are three types of popular property choices and, in part three of our mini series, we’re turning our thoughts to the issue of maintenance and upkeep and how this relates to these three types of properties.

If the amount of maintenance and upkeep needed for properties are key concerns for you, then it’s definitely worth carefully thinking about what type of property you want to purchase. Newly built property and off plan properties may win over with their short term benefits of being low on maintenance and upkeep. If the properties have been built and finished well, then in theory they shouldn’t need too much maintenance to be done for a while.

Depending on their age and the overall state of the property, then there may be a tendency for older properties to be more likely to require regular maintenance and upkeep.

However, this isn’t to say that old build properties can’t be low maintenance too. If they’ve been well kept and cared for, in the long-term they may offer benefits for being sturdier than some new builds, with more substantial and thicker walls. 

If you’re not that keen on having to sort maintenance and upkeep problems on rental property out yourself, then it’s a good idea to use a letting or rental management agent. They’ll handle the full lettings process for you, including any problems that arise, and will have a list of reliable handymen to call on in times of need, which takes the hassle away from you and gives you more time to focus on the business side of property investing.

Old build versus new build and off plan property, part 1 – Cost

Old build versus new build and off plan property, part 2 – Renting

In the first part of our mini series, we explored the issue of the cost of properties and the pros and cons of different types of investment property. Now we’re turning our thoughts to the all important issue of rentability, or how well your property is likely to to rent out.

As everyone buying investment property will be keen to get the figures adding up and tenants in place, this is a crucial factor to consider when you’re deciding whether to buy an old build, new build or off plan property.

Old Build

Pros – If you’re buying your old build investment property in an established area that already has a good reputation amongst renters, then this will help with the rentability of your property. You’ll also be able to gauge a good idea of how much rent you can expect to get, which is useful for when you’re working on your projected figures.

Cons – When you first take on an old build property, and especially if it’s been through a fair bit of wear and tear, then you may need to spend time updating the property or decorating it. Depending on how long this takes, then you could lose out on getting a tenant in straightway.

New Build

Pros – Buying a brand new property does have its benefits, not least the fact that it should be ready for a tenant to move into almost immediately. As far as making money goes, this is good news for any property investor. Depending on the location and how the property has been finished off, you may be able to charge more for it.

Cons – Depending on the stage at which you purchase the new build investment property, and if it’s on a large development where more building is going on, it does run the risk that tenants will end up living on a building site for a while, which some people aren’t keen on. Some new build properties may tend to be smaller and more squashed in than old builds, with smaller sized rooms and less space outside.

Off Plan Property

Pros – Like new build, there are benefits in attracting tenants to a brand new property and, in theory, you may be able to charge more rent as a result.

Cons – The nature of off plan property, and the fact that you’re buying before an investment property is finished, means that you may have to wait a while before you can get tenants in and start earning. Like new build investment property, there’s also the risk that more building work may still be going on around your house or flat, so tenants may be living amidst noisy building work at first, which doesn’t appeal to everyone.

Location, location, location – not only is it the name of the popular Channel 4 property hunting show, hosted by Phil Spencer and Kirstie Allsopp, but it’s also one of the most crucial aspects to get right when you’re investing in property.

First time property investors often assume that they should find a property in close proximity to where they’re based. The reasoning behind that thought is that they’ll be near by to sort out any problems, can check on it regularly and keep an eye on the local rental market.

But whilst it may seem sensible, serious investors need to look at other factors in relation to the location too. It doesn’t matter whether the property is located just down the road or two streets from you, what matters is whether the figures add up and if it’s a good location for tenants.

Here are six important factors to consider before you part with your cash:

1. Most importantly, you need to consider what the cost of the property is, what the return on the property is likely to be and what rental yields you could achieve. 

2. Study the existing rental market in that area and the prices being achieved. Is it in an area where the demand for rental properties is outstripping supply?

3. Is the property near popular children’s primary or secondary schools and could it attract families looking to rent?

4. Is the property located near universities or colleges and would it be attractive to the student rental market?

5. Are there any large hospitals or factories nearby? If so, it could attract workers needing conveniently located housing.

6. Is the town part of a regeneration project? In time, this could help increase the value of the property.
Although it may be tempting to go with the first property you see available for sale, if you want to make money from your investment, you should do your homework first. If it all adds up, then go for it.