Thursday, 16 October 2014

Buy Well, Don’t Chase the Yield

They say you make your profit when you buy a property, not when you sell it

You're more in control of what you pay rather than what you are forced to sell for

With this in mind, why pay the high end retail price for a property just because it looks sweet & idyllic, when what you really need is a property that meets all the financial requirements of a landlord first & foremost?

It is so easy, especially for the novice property investor, to fall in love with a property and let their heart rule their head, and to become so emotionally involved that they lose control of their finances and let their emotions win 

The most important message to convey in all of this is that investors must buy well in the first place, because if you start the investment process in the wrong place, the rest of the maths just do not stack up

If a property price is too high, and you just cannot get anywhere negotiating some money off the price, then there is only one thing to do and that is walk away, there will always be another opportunity along soon

The novice investor often thinks that by paying more for a property they will get a better property or a better tenant but this is not necessarily the case

Investors cannot reasonably expect the market, which is an average of many transactions and house prices, to change its tune in order to meet them at the now inappropriate level of return (yield) that they expect, simply because they paid too much – market forces don’t work like that

If a property investor is not sure on the potential rental levels for a given location, they should speak to us for free, impartial advice 

We can let them know not only how much rent to expect, but from that we can advise them how to work out what the maximum is that they should be paying, and how ‘lettable’ a particular property may be – there is absolutely no point in buying something, or somewhere, where very little demand exists

And as for buyer beware, novice investors better had beware it with a capital B

Check out the larger, more important facilities in the house such as the boiler, electrics and plumbing and check for any signs of damp

This is especially important when buying at auction or paying in cash, because many investors won’t do this, and if they end up buying a problem then they will own that problem

If you're thinking of getting into the property rental market in Sunderland and don't know where to start, speak to us for impartial advice and guidance to get the best return on your investment

For more information about potential investment properties, or for advice on your own investment choices, call us now on 0191 567 8577 or pop along and speak to us in person at our offices in Frederick Street, Sunderland

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