To be successful at property investment you should start strong and gain momentum.
And this all starts with your very first investment property.

Your first investment property will be a learning experience which serves as the foundation for future successes (or failures). Understanding the basics before you take out a mortgage or use your savings to invest will certainly help you in the long run. We've detailed 4 basic prerequisites to investing in property before you embark on the journey of property investment. These tips should ensure you experience long term success in the property market.

Beginners Guide To Investment Property

Before you jump right in, you should know what you can and can't afford. So this segment will be omitted, but a budget is essential to finding success in your first investment property.

1. Consider The Unexpected Costs

The biggest drain to a first-time investor’s ROI isn't time to wait for the investment to mature instead it's the hidden costs involved in owning investment property. Take into consideration things like tax and management fees and realise how these will impact your profit margins before you invest in property. A buy-to-let investor won’t have as much profit as they may expect as they’ll still have to deduct income tax to determine their net profit. When purchasing a property whether freehold or leasehold an investor will need to cover these costs: solicitor’s fees, survey fees and stamp duty and land tax.

Property management fees can be passed on to the lessee, however, they’ll be covered by the owner if the property is vacant.

2. Find The Right Area

The right area doesn't have to be the trendiest part of town or the best place to live. Finding a prime rental property doesn't even have to do with the amenities within the home (although this is important) it really has to do with finding the right area that has something to offer.
Yes lessees (tenants) may be searching for property in the city centre but are more likely to settle in Bishopsworth, Bradley Stoke or Hartcliffe because of its favourable rental prices. Not only that but a rental unit is only as good as it's surrounds and what that has to offer. As an investor it's your duty to think about who would be letting the property and what matters most to them. A young professional may want access to pubs, rail links to town and an active, younger community. Whereas a family would want access to schools, recreational facilities and a residence in a quieter, safer suburb. The area you purchase your investment property in will have just as much to do as the type of property you buy. Remember when it comes time to find tenants the surrounds will have just as much impact on their choice as the square footage.

3. Find The Right Property Type - Leasehold or Freehold

It's all about you ROI (Return on Investment). Hence, it’s crucial that you don’t look at investment property through the eyes of a resident. It's about what makes the most financial sense in the short and long term. Short-term gains may present themselves in a leasehold property if the requirements aren’t too stringent and you’re able to sublet the property. They’re also better if you’d be able to purchase the property without a mortgage. You could also consider commonhold for flats and freehold for houses. Both give you more control as the owner and the terms are more lenient, however, these can be quite pricey when you start out in property investment.

4. Choose The Right Team

Your property management team is second only to your accountant or banker. They're on the front line of and will do everything from help you negotiate the best deals to finding the right tenants. In the long run, they'll also take charge of the upkeep and maintenance of your property ensuring that you don't lose valuable pounds because of damage or wear and tear. The right team should comprise of an experienced estate agent as well as a property manager. The right team will also facilitate and encourage growth, even offering advice about great investment opportunities and properties.

Bristol is one of the fastest growing cities in England, and potential for growth is exceptional especially as residents migrate from London to the city for a whiff of the Bristol air and other perks that come with living in the city.

If there's ever been a time to invest in property, now would be that time.