Knowing Your Investment Area & How To Make It Work For You
Knowing your area is one of the most important things you need to be doing when looking at investing in property anywhere. When borrowers come to us looking for help with their investments or for bridging finance, one of the first things we do is research the area and make sure that due diligence is paid in establishing if that area is suitable and is likely to be profitable should you invest there. This article is part of our educational series where we teach you more about what it takes to be a successful property investor, so stay tuned for our very top tips.
What Research Can You Do From Home?
A lot of your initial research can be done from the comfort of your own home, and should be to make sure you’re not initially wasting money going to visit somewhere. Generally if you’re looking to purchase a property in a location specifically for letting out then you’re going to want to start looking in the North West or East or in Wales. You’ll want to be finding an area and researching the property prices, sales prices and rental value. Websites such as Rightmove and Zoopla are some of the best websites for finding out more information on how the price for a particular house has fared over the years, as well as the sales prices for houses on the same street. SpareRoom is also a great one for finding out the rental value. You’ll ideally be wanting to look for a property that has been traded in the last 3-6 months or one located on the same street that has a similar style or condition. You’ll also want to look ideally for a place that is increasing in value, rather than one that has been on a decline for a number of months or years. There’s no use considering a property that has sold for a lot more because it has a loft conversion or extension on the back, unless that also applies to the property you are looking at. Ideally, at this point you’ll want to narrow it down to a few areas, so that you have good back-ups in case they don’t pass the next round of your diligence checks.
Getting In Touch With Lettings Agents
Lettings and real estate agents are some of the best sources of knowledge you can tap into before making your purchase decision. Start by initially calling them and finding out more information about the place where you’re looking to purchase. You can start by finding out what the demographic of your tenants would be, whereabouts renters live, whereabouts homeowners live, as well as students if applicable. You may also want to ask them about the biggest employers in the area, as people often do want to live close to where they work. At this point, you may well have in mind which areas are going to be the most promising for you to invest and may wish to go and visit the area. At this point, go in and visit all of the lettings agents so that they get to know you. It’s likely that they may take some time to warm up to you, especially if you’re taking up their valuable time asking questions! But the more they see your face, the more beneficial knowledge you’ll gain on your area. After all, once you’ve found a great area to invest, you can continue finding properties nearby and knowing the agents who list them will work in your favour.
Visiting The Area
When you’ve decided to visit your area, spend it talking to the real estate and lettings agents but don’t neglect getting a feel for the area. After all, if you want to purchase somewhere with the idea to let it, you need to get in the head of the person or family who’ll be renting your space. Taking a map into the agents and asking them to circle where the good and bad areas are will be helpful so you can make a more informed decision, as this is often information you may be unable to find online as you need first-hand knowledge of someone who does live there. Furthermore, you’ll want to know where the schools are, the hospitals, the supermarkets and the employers as we mentioned before. If you know to which demographic you’re going to be renting to, then knowing the area gives you some good context as to whether it’s going to appeal to them.
We hope you found today’s topic of knowing your area helpful! If you have any questions about your property investment projects, are perhaps looking for bridging finance or if you’re an investor looking for opportunities to earn greater returns, please do get in touch. You can reach out to us through our social channels, through email at info@djfam.co.uk, through our website contact forms or by calling us on 0207199648.