Firstly is decide which tenant market are you targeting? Do you know who todays renters are and who tomorrows renters are likely to be? In Terry’s opinion you need to be very familiar with answers to these questions. If you don’t know the answers Terry suggests you invest some time and carryout important research. An expert local lettings agent such as those Terry runs will help you understand what is driving the local markets now and how local developments may have a bearing on future tenant demand.
Once you’ve decided on a tenant profile you are now ready to start looking for a property to invest in. Think about the attractiveness of a property; this will be extremely important when the time comes to move on and sell the property. Attractiveness is not just the look and feel of the property but also the immediate area around it.
Cash or Mortgaged
If bought with cash you maybe in a stronger position to buy than with someone with a mortgage – it entirely depends on the vendors circumstances. Property can be a good use of cash as against investing in bonds or long term deposits.
If bought with a mortgage seek advice from friends or colleagues who may have had a mortgage arranged for them recently. Alternatively speak to your letting agent who will be able to refer you to an experienced and qualified broker.
Buying with a mortgage will enable you to use your cash over more property deals and exploit future capital growth to the full.
Points to Include in Negotiation
Once you’ve found a property you are comfortable with find out why the property is on the market. Try to meet the vendors. You may get more information that will help you assess the vendors motivation and allow you to see how you can help to structure an agreeable deal.
Agree a schedule of condition with the vendors and visit 1 or 2 days prior to completion to avoid expensive shocks.
Agree with the vendors that you or your agents will market the property during the purchase period and agree access for viewings during this time.
Agree access for your heating engineer to check the heating system and electrical installation pre completion. Renegotiate if serious issues are identified.
Don’t compromise and buy an ugly monster of a property just because it sounds like a good deal – you may struggle to sell it in the future.
Advice Dealing Estate Agents
Investigate very carefully what someone else claims to be a great deal. Find out if it is so great why is it still for sale?
Think very carefully before taking advice from the estate agent you maybe buying the property through. You are not their client. It is the vendor who pays them.
Terry Lucking is the owner and director of Belvoir Cambridge and Belvoir Peterborough. Terry and his team are willing to help investors and landlords offering free pre purchase visits and rental assessments.
Belvoir Cambridge and Belvoir Peterborough are accredited and regulated agents. Members of ARLA, Safe agent, Safeagent and the Property Ombudsman. It is a requirement for a member of ARLA and Safe Agent to have Client Money Protection and have their accounts independently audited annually.
If you are considering using an agent that isn’t a member of Safe Agent or ARLA ask yourself a question – would you think would allow an unqualified heating engineer to work on a boiler?
For more information or to ask Terry a question send an email to email@example.com