Keeping key investment principles in mind will get you the best bang for your buck
Investing in a property in London is a good move, but the process is not quite straightforward. There are things you need to know if you want to acquire your desired property at the most reasonable price. Aside from that, you have to be prepared for the necessary documents in order to transfer the property into your possession and ownership.
Before that, it’s important to ascertain if the property is indeed a worthy investment. Here are nine things you should know about investing in a property in London:
1. Organize Your Finances Before Making The Property Investment
It’s always wise to plan based on your financial situation. Decide on why you are investing, whether it’s based on capital appreciation or profit. This will help you make the right decisions when investing in a property.
Be realistic on which aspect of the property features are compulsory and the ones you can compromise on to secure a suitable property based on your budget. The type of property and the location will go a long way in determining how much you will spend. To avoid underpaying or overpaying, ask other investors about the estimated amount on the type of properties you’re eyeing.
“A great way to buy property in London (and indeed the UK) is at auction. However, it’s imperative to have your finances prepared and ready to deploy within short timeframes. The outcome of not doing so could be the loss of the deposit paid (typically 10%) and other quite severe financial penalties,” comments Ruban Selvanayagam of auctioneer and quick buying company Property Solvers.
2. Search For the Right property
This starts with having a clear understanding of your needs. Do your research with an open mind. You can surf the internet to get basic information on properties that will add value to your portfolio. There are several properties available for sale online, but looking for a property that will suit all your criteria will prove difficult to find.
If you’re having a hard time looking for properties, you can enlist a professional property consultant or agent like London Property Investment to represent your interests and negotiate the price in your favor. Hiring an experienced property manager will ease the burden off you as they are better at finding properties for sale.
3. Select The Right Location
A good location is key to the right property investment. Local amenities and a safe social environment are essential to attract tenants and get a significant return on your investment. Hence, properties that are located in vibrant neighborhoods with great schools, hospitals, and transport links will make a good investment. Having social hotspots that interest people like a trending fast food restaurant, amusement parks, and cinemas, among others, is a plus too.
4. Hire A Property Solicitor
Even if you are a seasoned real estate investor, it is still wise to engage the services of a property solicitor when buying properties in London. A legal advisor will support you through the whole process by helping you make decisions that will favor your interest. They will also ensure that all legal procedures and demands are fulfilled. The solicitors will analyze the draft contract from realtors and raise any potential concerns. Having a property backed up by the law is one of the best ways to secure your investment.
5. Understanding Freehold Or Leasehold Ownership
Freehold and leasehold are the two major ways to own a property in London. A leasehold means that you own the property for a fixed period which must be specified in the leasehold agreement. At the end of the agreed period, the property reverts to the freeholder. Many properties are sold and bought like that in London. You can consider this type of ownership if you are simply aiming to test the waters, and you’re not ready to invest for the long haul.
The freehold form of ownership, on the other hand, signifies that you own the land and the property outright. This means that you can own and use the property for as long as you like—being a permanent owner. This is a better option if you intend to invest in a property for the long term.
6. Get The Best Mortgage Deal
If you’re purchasing a property in London through a mortgage, it’s essential to do your due diligence and get a reputable lender that can provide you with fair terms. This will help you get a mortgage deal that suit your personal and financial situation.
You can also seek advice from a mortgage broker to make the whole process smooth and easier. If you plan on renting out the property, don’t rely too much on your rental income to pay for the mortgage, as this is not always reliable. Tenants might renege on the lease contract, and you might be left with the burden of paying a huge mortgage.
7. Nearby Transportation Options
Properties with easy access to tubes, also known as underground rail stations, often have better values even if they are located in cheap neighborhoods. So, this is another feature that you have to look out for before investing in a property.
Even if you decide to drive, note how long it takes to get to the nearest transport station, especially the tube station. This is essential because most of your tenants might need quick access to a public transportation system.
8. Talk To Residents
The best reliable information about a neighborhood and the property you are purchasing can be taken from the residents or locals. Make inquiries about the nearest hospitals, schools, public spaces, and overall safety and security of the area. Most people are always happy to render advice to people who may become their potential neighbors.
9. Add More Value To Your Investment
This is important to boost the property’s value if you plan to resell or rent it. Renovating doesn’t need to involve much money. Just do basic refurbishment to essential places like the kitchen and bathroom, as these are the core places that tenants watch out for. You can repaint the property with white paint or neutral colors to give it a neat look. You can also add a basement to add more room to the property.
Following the tips above can help you make the right decisions. Investing in real property is not easy, especially in a bustling city like London. Prices are usually high, but as long as you do your research and make the right moves, you can still get the best returns for your investment.