Investors are serious about one thing – making money. If you are in the residential investment property business in the UK it stands to reason that you want to make as much of it as possible. But making a profit isn’t something that happens by magic. It takes planning and often hard work in order to make it in the rental housing business. And it all starts by assessing whether or not your potential realty purchase will help you meet your investment goals.
Finding the Perfect Property
The first part of the assessment process is to actually find a property that you like before you make your realty purchase. Whether your goal is for flipping houses, estate investing, or to acquire a process to let, it all starts with touring different properties to see which ones you like. This first step is all about taking into account what you like about the property, which will differ from person to person.
What are the expenses?
A crucial factor in residential real estate investment is to consider the expenses that go above and beyond actually purchasing the property. These include repairs, utility, taxes, standard maintenance, hiring a property manager, or anything else that may creep up. It may take some time to come up with a complete list, but is an essential step.
How will the money be made?
With a residential property, the common way for it to make money is to turn it into a residential lease property. However, there are other ways to make money such as with flipping properties and houses. For example, if you plan on renting it out, think about how much money you can get from your tenants. If the amount is considerably lower than your yearly expenses, the property is not worth buying.
If you are flipping houses you will also need to consider potential appreciation and depreciation in your figures. Much of the success in this business has to do with these figures. Unfortunately, it can be hard to predict – especially without expert help.
Hire an Expert Analyst
The more detailed your assessment is, the more likely you are to make a realty purchase that will actually profit. That means that you should hire a realtor expert and a financial analyst to help you weigh the pros and cons of the property before you make a decision to purchase it. Housing properties that are not making any money can be a serious financial drain that can result in financial catastrophe.
Purchasing a residential investment property in the UK is not a trivial matter. An investment is only worth it if it stands to gain you money. It will not do that if you do not take the time to consider the earnings and expenses.