How to make sure your property investment stands the test of time

Property investment is a popular way to create financial security for the future. Choosing a property to add to your portfolio as a landlord is a lot different to finding your dream home. In recent times with the pandemic causing unprecedented changes to the lettings market, it’s really brought to light the importance of future-proofing long-term property investments. But how can you do that without being able to look into the future? Let’s take a look.

What should you look for in an investment property?

If you’re looking for property it’s likely that you’ll already have a budget in mind, but it’s important to make sure the property you are purchasing is not going to cost more in upkeep and renovations than you will make back in rental income.

Research the area you’re looking to purchase in. What is the average rental price of similar properties in your area? This could be something to contact your local agent about. They will be able to assess the properties value and advise a realistic monthly rate.

What is the state of the inside of the property? It’s important to factor in how much time and money the property will need to get it to a standard to rent out. Check for structural signs of wear and tear. How much will you need to change the internal fixtures and fittings? Buying a newer property might be more expensive initially, but could see you spend less in the long run.

For many of us at the moment, being outside has become a treasured part of our daily lives. Having it taken away from us a couple of times in recent years means private outside areas have become more popular according to data provided by property portal Rightmove. If possible, choose something that will meet this demand, even if it’s a small area for outside dining.

What’s the best way to use an investment property?

The traditional use of a rental property is great for long term goals. More and more people are looking for a long term letting option to call home so that they can put down more permanent roots. This explains the rising popularity of lease agreements covering a longer period than just 12 months. Long term agreements ensure the property stays inhabited for longer periods of time. Good for tenants, a guarantee of achieving long-term rent, and a reduction in costs associated with regularly finding new tenants.

Another use that is growing in popularity is short-term holiday lets. With the increasing number of people looking to holiday in the UK, now is a great time to invest in the holiday market. Even if you have no intention of buying a property to use as a holiday rental, if you can purchase one that could fulfil criteria as a holiday-let, you’re diversifying your investment by adding another potential way to raise income from it should you ever need to.

How do you achieve a higher monthly rental figure?

You will need to consider the internal facilities whether your property is rented long or short term. Providing people with modern facilities can actually drive your monthly (or weekly) rental price up, so be careful what you pick.

Recent studies have shown people are willing to pay extra for rooms like the kitchen or bathroom if they are fresh, modern, and clean looking. This may mean investing in higher quality appliances or countertops. Look for materials that will stand the test of time without compromising appearance.

When should I sell my investment property?

An exit strategy may be an odd thing to consider when first looking to purchase, but having a long-term plan helps when considering all the eventualities. Whether the property is a retirement plan, an investment in children’s future or to supplement income, if you know how long you’re looking to hold the investment then knowing when to sell becomes easier.

That doesn’t mean selling doesn’t become an option earlier if it makes sense for you to do so. An example of this might be if it’s had a long void period between tenants, you’re losing money by paying a mortgage, yet property prices are high and would still give you a good return on your investment.