Property Investments - Posted 29/04/2009 12:00

W
ith all the doom and gloom surrounding falling property prices  you would be forgiven for believing that direct property investment has had its day. If your strategy was to purchase in 06/07 and exit in 09, you would be correct.

The fact remains that property is a long term investment option of a minimum of 7-10 years, and in my opinion is still the best medium to long term investment there is, providing you follow a plan that suits your profile and the market place you choose to invest in.

If you are considering investing in property, the current climate is offering some excellent opportunities, which history tells us won’t last forever.

In recent times a great number of investors (including myself) got taken in by unrealistic lending products, with the main emphasis being to put as little cash as possible into the purchase. This created borrowings in some cases costing nearly as much and in a lot of cases more than the rental income.

When you then consider voids and maintenance costs, this can lead to many portfolios haemorrhaging cash. This senario, tied in with a falling market has left many investors at best disillusioned and at worst bust.
The fact remains housing is a fundamental of life, and with a ever increasing population there will always be a demand for good quality housing in all areas of the market.
Listed below are some tips to follow when considering residential property investment.

• Select a location that is not saturated with rental properties

• Ensure the position of the property is condusive to the tenant profile you want to attract

• Ensure the layout of the property is functional (kitchen size , bedroom size etc)

• Ensure the condition of the property is a to a good standard (nice house = nice tennent,)

• Select a quality letting agent (such as CC Homes) who specialise in understanding the local market and can handle all aspects of the investment.

• Ensure your rental income is 30-40% more than your mortgage payments .
(even if you are not looking to make an income, your property/portfolio should aim to be profitable year on year).

• Ensure you have a contigency fund for unforeseen circumstances for example; voids, agency fees and maintenance costs.

Investing in property is not an exact science , but if you follow these basic principles you will in the long term improve your financial future.

If you are considering direct property investment, John can in conjunction with CC Homes offer a free consultation.

Email John at:enquires@cchomes.uk.com

Comments