London is a bustling capital city and this makes it an appealing location for potential property investment. However, if you are thinking about investing in property in London, there are a number of tips that you need to consider. These tips will help you determine if London property investment is right for you and ensure that everything goes as smoothly as possible.
Do The Sums
Before you consider any property investments, you need to work out the sums. Being a private landlord can provide you with good returns on your investment, but it can also cause some cash flow problems. This is particularly important if you are going to be taking out financing to fund the investment.
When looking at the finances, you should not only consider the cost of the property that you want to invest in. You also need to include the additional costs such as the insurance, letting agent fees, services charges, ground rent, taxes and any potential empty periods. If you do not take all of the potential costs into account, you could find that you misguide what you can and cannot invest in.
Know Your Mortgages And Insurance
If you want to get a mortgage for your investment, you need to carefully consider your options. While interest rates are low, they are expected to rise in the future even if this is not thought to be by much. This is something that you have to take into account when investing because a small rise could make your investment unsustainable.
If you are looking at a buy to let investment, there are some special mortgages that you can look at, brokers can help you with this, read more from Gladfish here. These mortgages have been designed to make this type of investment easier and will take the rental conditions into account. Of course, you do need to take the time to shop around for the best mortgage deal.
While you are looking at mortgages, you also need to look at the insurance policies you need. This is vital to your investment, but is another cost that you have to factor in. Some of the insurance policies that you need to consider include loss of rent insurance, malicious damage and building insurance.
Know Who You Are Targeting
If you are serious about your property investment, you need to do your research into who your target market is. As you are looking in London, your primary target demographic is likely to be working-age individuals who are looking for rental property. However, within this demographic, you will find further sub-divisions that you need to pay attention to. Most new investors are a little unsure so they hire property investment companies like Thirlmere Deacon to help them in the targeting buying process click here to see their services.
After all, a middle management individual is going to be looking for something different from an entry-level employee. Knowing your target demographic will help you determine what property to invest in and where in London you should be investing. You need to look at the average rents and the demand for housing in different areas to help you make your investment decisions.
Do Not Rely On Rent Alone
A mistake that many new property investors make is to rely on rent alone as their return on investment. While this is the return you will be able to see, the value of the property should also be taken into account. The value of the property is a more long-term investment return when compared to the rent, but is just as important.
To ensure that the value of your property remains sustainable, you need to complete on trend refurbishments. This will not only increase the overall value of the property, you could also increase the rent. However, you need to be careful with any renovations and not spend more than 10% of the value of the property on them.