Saving long term can be difficult at the best of times, but this is especially true when you’re not sure where to put your money. Savings account interest rates are at an all-time low, yet there are still plenty of people out there who want to make money on their savings in the best possible way.
People often only consider long-term savings in terms of ISAs, bonds or low-interest accounts. However, take a minute to think of another creative way to save, and you’ll come to investing. Investment strategies are considered risky and sometimes insecure. Property investment is a much more stable and secure option that allows your savings to become an asset and gain monetary value over time. If you think the option of investing in property is something you will benefit from, it’s essential to do your research before purchasing a development or refurbished property. Luckily, below are a few quick checks you can do before investing in a property, including how you can successfully make more money out of this new asset.
How much money can I make from investing in property?
While this question is commonly asked and thought about, it’s a difficult and generic one to answer. This is because everyone will make varying amounts of money from investing in property. There are some factors that influence the amount of return you will get through investment through capital appreciation and rental repayments (if investing in a buy to let opportunity).
A guide from RWinvest details the importance of considering the location you buy your property as this can have a significant impact on how much it gains or decreases in value. The likes of Northern cities such as Liverpool, Manchester and Sheffield have rising house prices and increasing rental returns, whereas London and Southern cities tend to be stagnating in value or even declining.
If you’re a savvy investor, then you can make a lot of money from owning property and selling it on or letting it out since property investment is a highly lucrative industry.
Tips to help you when buying a buy to let investment
- Keep to a budget
When purchasing and decorating/renovating your property, ensure you have a budget in mind. Firstly, you will need a purchase price budget and then depending on the property you’re purchasing, you may need some extra cash for other things. Property companies will sometimes offer furniture packs with their developments (especially if they’re new builds), but if not, then you will need money for this and décor around the apartment. If you have an overall amount you cannot exceed, ensure you account for all costs before jumping in and investing.
- Avoid renovation projects
It’s understandable that you may want to buy a house or apartment that needs renovating as a project. However, we wouldn’t recommend purchasing one as your first investment or if you plan on being hands-off with your investment strategy. Renovation projects can take many months and sometimes years, depending on the condition of the property. Unfortunately, a property can look great on the outside but have an endless amount of internal problems that set you back more financially than you initially thought. If you’re set on doing a renovation project though, you may want to carry out a survey on it before exchanging to ensure there aren’t any major problems that will set you back a large amount.
- Think about your target tenant
The only way you’re going to make money on a property is when you’re able to rent it out to tenants, and this can only be done if you think about your target tenant and their needs. For example, young professional couples will most likely want to live in the city centre , whereas families and elderly people will prefer to live in suburbs but also close to essential supermarkets and shops.