Want to turn your hand to property? Here’s how to identify the right investment for you.
The property market can be lucrative, but like all investments, it comes with risks and rewards and even the most experienced people get it wrong sometimes. The good news is that, unlike shiny new industries like cryptocurrency or NFTs it’s truly tried and tested, meaning there are plenty of experts out there able to offer sound advice and consultation to hopeful “propertreneurs”. Whether you’re new or experienced, it’s always good to have a refresh of the basics. So, with that in mind, here are our top tips for identifying the right property investment for you.
Understand if it will bring you consistent, long-term rewards.
Buying and selling property is not about quick wins – you need to consider if this investment will bring returns in 1-, 2- and 5-years’ time. Sure, that 3-bed flat next to the local university looks attractive in September, but will you be able to fill those rooms come June? Think long-term.
An area which rarely loses its appeal, in our experience, is holiday lets. If the COVID-19 crisis brought any good at all, it was in urging people in the UK to re-think booking that 4am flight to Spain and start appreciating the fantastic holiday hotspots we have on our doorsteps, like Cornwall for example. Now, the number of domestic holidays taken by UK residents is forecast to grow by almost 100% between 2020 and 2025[1]. Combined with Britain’s enduring appeal internationally, it’s clear why holiday lets can usually be relied upon to reap high returns.
Do not be fooled by looks alone.
Our second piece of advice is to remember that no property investment is useful without tenants. So why would people want to visit, or even live in, the one you’re tempted to buy? It’s not enough for it to just look attractive, although investing in a property which features unique, stand out architecture, appealing and carefully considered exteriors, and attractive and well-designed interiors are important and will help you stand out in the market.
Think practically. For instance – is there a reliable internet connection? This is one of the most common, but frequently underestimated, requests guests tend to ask. Is the property energy efficient (and importantly will it fulfil the requirements of any possible future government regulations)? Is it easily accessible for people? Is it in a safe area? Are the local amenities close-by that will be attractive to your target renter? These points all need to be accounted for before you sign on the dotted line.
Work out if you can really afford it.
The final piece of advice is to be honest with yourself about whether you can afford what you want to buy. Let’s say you’ve saved, or acquired, a large sum of money – this is where most property investors start. Your mind will immediately be running wild with possibilities about what you can acquire. But using the entire sum on the property purchase alone is risky and short-sighted. Mortgage advice, stamp duty, surveys, insurance, furnishings and – in this day and age – marketing, all need to be scrutinised up-front.
I personally always advise my clients to ensure they have funds available to cover any potential issues at the property once it’s theirs, particularly when there are tenants or holidaymakers to consider. Or, consider a new build which often comes with aftercare and build guarantees. But if the property allows for those expenses, as well as the points raised above, you could be onto a winner.
Investing in property can be a fantastic source of passive income, an asset which will grow in value (especially long-term), as well as being a potential holiday bolthole for you to enjoy. What’s exciting is that with the right knowledge and tools, anyone can get involved. Speaking to experienced experts – particularly those based in the area you’re looking to buy in – will further help you build your confidence and ensure you’re on the right track for success.
By Helen Stephens, Creative Director, Stephens + Stephens
About Helen Stephens
Helen Stephens, Creative Director at Stephens + Stephensv, has over 30 years of experience in the design industry. Helen founded Absolute, an award-winning design agency in 1991, before meeting now-husband and developer, Paul Stephens. Combining their passions, together they formed the perfect professional partnership and founded design-led ultimate-luxury property developer business, Stephens + Stephens.
Stephens + Stephens today create bespoke-designed developments in awe-inspiring spots within the Cornish landscape. By combining Paul’s developer ability with Helen’s design and marketing skills, Stephens + Stephens can approach and understand property from both a business and consumer ability. Always with the provision of the ultimate Cornish life + style living benefits forever front of mind.
[1] Source – Mintel. From c.£8bn in 2020 to c.£16bn in 2025