Remember, if you look at investment property in the UK outside of the area you live in, the situation might be totally different to an area that you are familiar with. For instance, you might be an investor in London who has done very well from one bedroom flats – that does not mean you can adopt a ‘one bedroom’ strategy in Bangkok property market or Hanoi, Dubai etc. The simple solution to the question “what type of investment property should I buy” is – ask established local letting agents. It might sound obvious but many investors ignore this simple solution.
Letting agents only make money when they let a property and many have tenants waiting. Why would they give you the wrong advice? Whilst their advice is not infallible, if you ask around and their is a consensus regarding the type of investment property you should buy, ignore their advice at your peril.
Which Area Should You Invest In?
The best advice we can give any property investor on where to source investment property is: if you do not know the area intimately make sure you do plenty of research first. We cannot stress enough that what holds true to your investment strategy in one area ie., one bedroom flats, may be a disaster in another area. In many areas, and particularly in low quality areas, the difference a few streets either way can make to the value or letting potential of a property can be immense.
If you want to invest in property outside of the area that you live in/know well, you either need to take the time to conduct sufficient research, or you need to employ the services of a local property investment broker.
Remember, you are not looking simply to spread your portfolio geographically, you are looking to find investment property that meets your investment strategy. To gain the reduced risk advantages of a ‘spread’ all of your properties need to fit that strategy. One or two bad property buys could severely affect your cash flow or gearing. So, remember your investment property strategy and then look at your options.
There are regions, cities, suburbs and streets which are better for high yielding investment properties, and other regions, cities, suburbs and streets which are better for capital growth. There are other regions, cities, suburbs and streets which offer investment properties which fall between these two extremes.
Once you have chosen your area or areas, the rest is really common sense. I’d suggest you talk to estate agents. I’d also find other investors and traders in those areas and talk to them and let them know that you are in the market to buy if they want to sell some of their properties. And of course use the Internet. There are many sites now like fish4.co.uk and www.rightmove.co.uk which allow remote property searches.
In our opinion you simply you cannot get enough information. Subscribe to investment newsletters, read property investment blogs, read the financial and property sections of newspapers both local and national – especially the quality national Sunday papers, and keep up to date as best you can with the state of the UK property market.
If you decide to use a property investment broker, remember that a good property broker in a bad area is better than a bad broker in a good area. There are always good investment properties to be had in any area, and a good broker who sources investment property according to your strategy will equate to money well spent.