Property Investment for Beginners: Guide to everything you need to get started.

Have you ever wanted to invest in property, but have been put off by the daunting mountain you feel you have to learn? Well, don’t worry as we’re here to turn it into a molehill. 

In the current financial climate, with low-interest rates and a fraught stock market, investing in property is seen as a safe return on investment. The main two ways are earning money by renting out the property or by selling it for a profit as it increases in value over time. However, there are some uncontrollable variables to keep an eye on such as housing prices, demand for rent, tax implications etc which can all wildly fluctuate.

Pretty much any type of property can be purchased as an investment, such as an apartment building, a single home, a Buy-to-Let property, commercial building or even vacant land. You don’t have to purely focus on looking at high-net-worth boroughs in order to make a return on investment. It can start by simply purchasing another home. What matters, is to make sure that the area’s value, and therefore the properties, will increase. We analysed a recent Chesterons report, outlining some of the areas that are seeing an extremely high growth, so it’s worth checking that out if you’re interested in researching further. A second thing to consider is some specific types of properties if you’re looking to make a head start.

Off Plan

This is a type of property where the premise is brought before it has finished being built. It may sound odd to purchase something before it is completely finished, but the idea behind it is to then allow the price of the eventual-completed property to rise so that the future asking price is significantly higher than what it was originally brought for when it was only semi-completed. This approach yields a significant return on investment, particularly in London where there is a strong rental market. When it comes to purchasing an Off-Plan, important things to consider include good nearby transport and facility links, the possibility that the turnaround time might not be met and to be prepared and finally to constantly check up on the progress of the building.

Buy-to-Let

With Buy-to-let properties, it takes off-plans that one step further. With these, you can form two streams of revenue, as an off-plan can be bought, rented out immediately in the short term and then make a capital gain in the long term when it is sold off at a profit. Typically, investors who work with Buy-to-Let properties generate an income based off of rent garnered from their portfolio of properties. Going down the Buy-to-Let route is appealing for many, since there is a high demand for rental property, due to an increase in population, you can earn an income, while the property increases in value over time. In fact, according to a report by Estate Agents Savills, there has been an increase of 2.3 million renters in Britain over the last 10 years, so there is a strong probability that you won’t just be investing in an empty asset.

Whenever you decide to go down either route, the process of buying an investment property is exactly the same is more or less the same as buying a house. You can advertise to renters on property sites such as Rightmove or Zoopla, without having to pay up front fees,. If you ‘re still interested in property investment, we can start you off with a couple of off-plan development sites that are available right now for you to check out and enquire.

The first is a suite of apartments named One Park Drive, designed by Swiss architecture firm Herzog & de Meuron and is in Canary Wharf. The complex consists of over 400 apartments and penthouses on 55 floors. At the time of writing, the average asking price of the ten suites left is £613K, the 7 of 26 one bedroom flats that are left cost on average £773k, the 11 of the 19 two bedrooms that are available cost £1 million and finally the 5 three bedrooms of 8 that are available for purchase cost on average £1.3 million. Worth mentioning is the £2K reservation fee for premises that are under £999,999 and a £5k fee if the property is £1m +.

The second complex is Lincoln Square, situated in the heart of Western Central London and adjacent to the London School of Economics (LSE), one of the world’s leading social science universities and ranked second in the world for the highest proportion of international students. Average prices for one bedroom flats in this area cost on average £1.4million, with 2 bedrooms and 3 bedrooms costing £2.8 million and £4.2 million respectively. The reservation fees for these flats are as follows: less than £1m is £2,500, between 1,000,001 and £3m is £5,000 and over £3 million is £10,000.

Armed with the new knowledge and a starting point to invest in, we hope we’ve given you enough to make your first foray into Property investment, let us know if you have any questions and we’ll make sure to keep you updated on the flats that are available in next weeks post.

Image Credit: group.canarywharf.com

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