Are you planning to invest in property in 2021? Whether you’re a seasoned landlord operating a string of residences or a first-time investor just discovering the potential of the buy-to-let sector, certain core principles apply.
“The Fabrik Invest team believes wholeheartedly in an educated investment process, so we are delighted to be able to share these top tips for investing in property in 2021. Each and every one of these tips can make a significant difference to how successful an investment can be, so we always advise investors to consider any potential scheme in light of every factor.”
Dale Anderson, Managing Director, Fabrik Invest
Fabrik Invest’s top 10 property investment tips for 2021
1. Do your research
Location, location, location! Make sure you do your research, focusing on the best locations. These include areas close to a city’s business district and universities, so you can attract the right types of tenants.
Central locations are often the most sensible in terms of demand, but this needs to be considered on a case-by-case basis. In Manchester, for example, it is Salford Quays that is delivering the ideal blend of location and profitability for investors at present, meaning that developments such as Michigan Towers are of particular interest.
2. Compare like for like
Consider your options for the local market. Always look for properties where you are paying a reasonable price per sq ft compared to similar buildings in the local area, as well as those where tenant demand is outstripping supply.
3. Think long term
Successful buy-to-let investment is about investing for the long term, not just the immediate future. That means looking at which locations are going to still be popular five or ten years from now. City centres with major regeneration projects have plenty of potential here.
It’s also important to look at industry expertise. JLL, for example, projects that Birmingham will see the strongest house price and rental value growth in the UK over the next five years. This means that developments such as FiftySixty, in Birminghams’s Jewellery Quarter, deserve particular attention when it comes to their investment potential.
4. Review the developer’s track record
Make sure you are investing with a credible developer that has a solid track record of delivering quality properties. Ensure that they are not solely relying on investors for funding, i.e. they have commercial lending or are fully funded. This is non-negotiable when it comes to protecting your interests.
5. Consider payment terms carefully
Most credible developers will only ask for 30% maximum deposit and then the balance at completion. This means they have their bank funding in place and that the banks have scrutinised them. If you’re being asked for more than 30% before completion, approach the investment with caution.
6. Choose the right agent
If you’re investing from overseas or simply a busy professional who’s planning for retirement, chances are you are short on time. This means you need an agent that provides a full management service. Choose the right partner who can negotiate the best deal with the developer, recommend reputable solicitors and financial advisors and offer you an ongoing, long-term support structure and after care service.
7. Don’t shy away from off plan
You can often find reputable developers, choose the best apartments and get the best deals by buying off plan. This allows you to benefit from maximum capital growth and rental yield returns. Some developers offer a rental guarantee period for the initial few years.
8. Understand your yields
Ensure you understand fully how to calculate yields, accounting for any mortgage payments you’ll need to make. Combining record low borrowing rates with high-yielding locations means you can maximise your return on cash invested, with your rental income covering your loan.
Based on the Totally Money UK Buy-to-Let Yield Map 2019/2020, it is the Liverpool L1 postcode area, which covers the central retail area (including Liverpool One), Chinatown and the commercial district, that is providing the best yields in the UK, at 10%. Time, then, for investors to take a close look at The Roscoe, in the heart of the city centre.
9. Buy with a Ltd company
There can be huge tax benefits to purchasing through a company rather than a personal name. Fabrik Invest can put investors in touch with GetGround, who can assist with this.
10. Buy with your head
There’s no room for sentiment when it comes to property investment. Trust in focused research and sound due diligence so that you can buy with your head every time.
To find out more, call Fabrik Invest on 020 8175 9891, email enquiries@fabrikpropertygroup.com or visit www.fabrikinvest.com.
