As a property investor looking to buy property, you probably hear the words ‘due diligence’. This is an important part of your responsibility to yourself to ensure that a particular investment property is right for you. This means making sure that before you buy property, a development meets the criteria that you have for your business model.
Check the rental returns in the area – try to use letting only agents as they have no conflict of interest. Estate agents are trying to sell property as well.
Check selling prices of similar properties – there are lots of web sites available eg rightmove to allow you to research the market easily.
Find out if there are particular requirements to ensure a good rental return before you buy property furnished or part furnished? Parking? proximity to public transport? etc.
In university towns you can contact the accommodation officers who will be able to inform you of student needs and you could be included on their landlord lists.
Can you get a suitable mortgage for the property you are interested in – there are many mortgage brokers who specialise in buy to let and several websites to guide you to the best buys in the market at any particular time. Bear in mind that it is not just the best interest rate you need to consider, but also the arrangement fees and tie-ins.
If you are new to the property investment market, do your research about your responsibilities as a landlord – buy a book or register with one of the independent landlord web sites – they have loads of advice and often offer free downloads of legal forms/inventory lists etc.
Are you going to manage the property yourself or use an agent? What are their charges and how long do they usually take to let a property? If you are doing it yourself are you confident you know how to check a credit history?
If you are buying off plan decide if you are going to keep the property when it is completed or are you intending to sell on at or before completion and check the tax implications with your accountant.
The most important factor in due diligence is RESEARCH. Know your market and your customers and you should be on your way to becoming a successful property investor.
