Buying or selling an investment property can have a lot of impact on your financial lifestyle, both current and future. If you buy the wrong property, or, buy or sell at the wrong time – there is a chance you will make the best decision you will ever regret! Done with a bit of planning, property investing can make a huge difference to your financial health.
The most important thing is to decide is what type of investor you are. Looking for the best returns only, can often lead you in to a great deal of strife if other personal criteria are not met. I will briefly run through some of my pearls of wisdom (I like to think they will be of value) which I have gained from being in property sales and having investment properties for over 20 years.
1) The Long term hands off investor: Do you want to keep your investment until you retire, which will then provide you with a weekly income, or have a property that you can sell easily if a serious event happens in your life? If this is what you have in mind, I suggest you look at low risk properties, which are often brick and tile and generally have the lowest return but tend to be the least problematic. Consider using a Property manager to take care of the property also.
2) The Short term do up and on-sell investor: Are you someone who is trying to quickly build wealth through property? Often people entering in to retirement are also looking for something to do. This is often a ‘hands on job’ or one where you need to take expenses of hiring tradesmen in to account and purchase if there is enough profit left after expenses and taxes are paid. This is where you look at do-ups, or new builds.
3) The family or friend investor: Are you considering buying to house a family member so that you can provide them some security? I have seen people often purchase a property for a child, sibling, parent or grandparent. This can be a lovely gesture but do talk this through with an independent party (an agent you trust, a lawyer or, a friend who is good at talking this through objectively). Often properties like this are purchased to help someone out, and sadly more often than not, that person ends up moving on and you may be stuck with an investment not ideally suited to you. There is no definite type of property here – but make sure it is one you are happy to have if your friend/family member moves on.
4) The naïve or wrongly advised investor: Sadly, this is a person who purchases the completely wrong property and sells it for a loss and has a stressful investment. Ultimately they never buy another and warn everyone against it, based on the unhappy experience. The unfortunate thing here is that if this person had been given the right advice and perhaps took just a little more time, they possibly would have been someone who would have eventually built a large portfolio because they were not risk adverse – which opens one to look at all opportunities.
5) Lastly the ‘have a go at anything' or the 'seasoned' investor: These people typically have a certain type of property they target. However they are open to opportunities including keeping a property short or long term, doing up and on-selling, or, adding ancillary dwellings or subdividing. These people typically end up with a large portfolio because they are always on the hunt!
It is really important to talk to someone who understands property investing. An agent who has investment properties themselves have learned from their own mistakes (if they’ve had any) and therefore they will not be risking your money by practicing on your investment. I own a number of investment properties and am more than happy to talk with you to establish what type of property may suit you best before you buy.
You can contact us at the office on 07 839 7060, Kim at firstname.lastname@example.org or 027 247 6564 and Jess at email@example.com or 027 821 0998.