When you’re starting out in property investment there are lots of things that may influence you.
There are all kinds of reasons people get into property - and while some people do really well, many more either struggle to make it work for them, or simply get disillusioned and give up. With several decades of experience here are my top five tips for laying the foundations in property:
1: Do your research
If you were planning to buy a high-priced item you wouldn’t just jump in - you’d do some research into suppliers, models, styles, prices, comparisons, ratings, recommendations. You need to do that about property too.
Talk to people who have successful property investments and ask them for their advice. You’ll usually find these people at property networking meetings or exhibitions (obviously not live until the pandemic restrictions are lifted).
Don’t believe everything you see on TV - there are some great ideas, but they don’t show the downside - it doesn’t make good TV!
Find out about different strategies and how they work, before you choose the ones you want to pursue.
2: Understand the finances
It’s not just about saving up enough for your first deposit, you need to have a good knowledge of how the buying and selling process works, not least the tax implications for buying/selling a property that is not your main residence.
Don’t ignore alternative funding - a mortgage is not the only way to purchase a property. You can buy cash (if you have a nice big nest egg) or you can buy like a cash buyer without a big nest egg if you understand bridging finance and have a broker experienced in bridging loans.
If you are considering joint ventures you’ll also need to have a thorough understanding of the FCA regulations in relation to ‘sophisticated’ and ‘unsophisticated’ investors.
3: Choose the right solicitor
If you’re going to do this as an ongoing career, even part-time, you’ll need a solicitor who understands your goals and is part of your ‘team’. That means, at the very least, a specialist conveyancing expert. However, if you plan to use bridging finance at all, you’ll need a solicitor who understands this too - as it’s a much faster process (and more complex legally) than a normal mortgage and mainstream conveyancing solicitors aren’t always willing to work fast enough, or cope with the extra legal work, to give you the flexibility you need.
4: Find your trades team
If you plan to purchase a number of properties, whether to let or to resell, you’re likely to need a reliable team of trades. We’ve all heard horror stories about plumbers that turn up late and builders that disappear for days mid-project.
To ensure that you can turn your refurbs and maintenance around quickly and get your properties tenanted or sold, you need a team of people you can trust to turn up, do a good job and leave everything in good order. Every day with an empty property is money down the drain.
Ask around and find plumbers, electricians, chippies, builders, kitchen/bathroom fitters, painters and decorators who have a good reputation and will do what they say they will - and finish on time.
5: Develop a ‘can do’ attitude
I call this the Millionaire Mindset - and you can read more about it in last month’s blog. Being able to set goals, create the plans to achieve them and take positive action is essential. As Dorye Roettger said:
“There are no problems—only opportunities to be creative.”
If you keep that thought in mind, you’ll be on the right track!
You can learn more here: