When you start your property search, you must remember that although you’re investing your money into the property, it isn’t actually a home that you’ll be living in. Therefore, you need to remove your emotions as it doesn’t need to meet your personal specification, but rather your business goals instead.
Looking at it purely from an investment point of view, you might want to consider the following:
Who do you want to rent to?
Consider the different types of tenants there are and which one you might want to rent your property out to.
How long might it take to secure tenants around this area?
Every area is different and it might take longer than you expected to find the right type of tenant. You should factor this into your business plan as you don't want to be left for months on end with no rent money coming in.
What is the rental market in the area like? Is it growing or declining?
Again, every location is different but it's important to do your research in the area you're looking to invest in. A local estate agents will be able to help you with this.
Is there the potential to build in capital growth?
It's important to always refer back to your business goals. What is it you want to gain from investing in property? If it's specifically capital growth, then you need to make sure that the property type you invest in has the potential to increase in value.
Will the rent you receive cover your costs?
You don't ever want to end up out of pocket, so make sure the rent you're taking in is enough to cover your mortgage (if you have one), but at the same time, make sure you're setting the rent at the right price, taking into consideration the location and type of property.
Have you looked at any forecasts for property growth in the area?
If you want an increase in capital growth, make sure you check any forecasts in property growth in the area, as this will give a reliable insight.
Once you've started viewing properties and have a clearer idea of how much this might cost, you can then use our mortgage finder tool to find the right mortgage deal for you.
Important information
There is no guarantee that it will be possible to arrange continuous letting of the property, nor that rental income will be sufficient to meet the cost of the mortgage.
Your property may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances. The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.