Understanding the property investment market

Understanding the property investment market

Property investment is booming in the UK. More and more people are turning to property investment over traditional investments as a way to fund their retirement and with the changes in pension reforms also boosting the market, the potential for high returns is drawing people in.

However, property investment isn’t just a walk in the park. To be successful you really need to understand the market, know your audience and do your research. Here are some tips on how to get to grips with the market and identify the best opportunities:

Treat it as a business – successful investors will treat investing like a business. They will develop a business plan, have a clear view of what they want to achieve, a strategic plan on how to get there and a good understanding of the type of property portfolio they want to build.

Know the market – successful investors will do their research and build an extensive understanding of the property sector they want to invest in. They will do their homework about who the target audience is they want to attract, what the likely demand is, how much the rent should be priced at and what the rental yields are likely to be.

Laser-Focus – the rental market is very diverse. As well as traditional buy-to-lets there are HMOs, PBSA and commercial properties plus a whole lot more to consider. Successful investors tend to laser-focus on a specific sector and concentrate their efforts in that area. This enables them to build significant knowledge about that sector of the market and this helps them to identify the best opportunities when they materialise.

Know the law – the property market is a moving feast and is always changing. As an investor it’s important to keep abreast of new laws and any changes in legislation. Successful investors keep on top of the situation when things change and they know how to take advantage or build in contingency plans when laws and legislation change.

Understand the risks –over-spending on renovation, not understanding the rental ceiling and suffering with void tenancies are all typical problems that inexperienced investors face. To be successful you need to plan for these risks and be mindful of your budget and your overall investment strategy

Successful property investment takes time, more than a little know-how and a lot of hard work. Every investor has to start somewhere and the more you can learn from people who have been there, done it and continue to be successful, the more power to your elbow!