What area should you buy your investment property in?
I thought I would talk about the area(s) you buy your investment properties in, as I’m sure you have heard lots of conflicting information about the best places to invest in (up north because it’s cheaper, down south as the capital growth is great, on your doorstep as you know the area etc) so let’s look at a few different advantages and disadvantages to help you make a decision that’s right for you.
My first point is that there are good investment properties everywhere. The property may be cheaper in certain places but more often than not the rent that you could achieve reflects this. The other point about investing in cheap property is that the capital growth is normally a lot slower. The positive in buying cheap property is that your money may go further. For instance, you may be able to buy 2 properties’ instead of just the 1. Something to be aware of is that mortgage companies don’t often lend on anything less than £50,000 (yes you can still buy property for less than £50,000 in some parts of the UK) meaning you would need to buy in cash. More expensive areas like London may be difficult to invest in due to the very high prices but also the rent that you can achieve is higher. It’s very expensive to rent but when you look at your investment purely on ROI and cashflow this may not be a great investment. If you are looking for capital growth and adding value (flipping for example) London could be very lucrative and big profits to be gained due to the capital growth that the area has to offer. As you may be aware, we (my dad and I) invest in the East Midlands. There are a few factors as to why we do this. One being, this is where we live and due to us managing our own properties we can react if there are any problems and maintain our properties to a high standard. We know the area very well and understand what different parts/streets can offer. We also know the areas we don’t want to buy in. The other reason is like I said before there are property deals everywhere you just have to know what you want out of the investment and where to look for the deals. We have personally grown our portfolio and bought 5 more properties’ in the last 4 years all in our area that we are very happy with and give us what we want from the investment.
A few things to think about and consider...
What do you want out of your investment property (cashflow, capital growth, quick profit)
Are you going to be managing the investments on going (if so how or are you going to get an agent to do this)?
Make sure you know your numbers (it might be cheap but do the numbers add up?)
To discuss this further and how I can help you achieve a great property portfolio book your call with me by clicking on the link -
Until next time...