With your finances and strategy in place, it’s time to take the next step – choosing a reputable company to match your requirements with the best investment opportunities available.
There are many companies in the property investment industry so you have to be careful about whom you choose to trust. Many advertised investment properties simply don’t make sense because the figures don’t stack up – you just need to know what questions to ask.
Research is the key; do you really want to pay for expensive seminars when you can get the same advice for free from experienced property consultants? Equally, beware of companies that offer cheap inspection trips, they often use hard sell tactics in the hope that you’ll sign on the dotted line without carrying out your own due diligence checks.
Another point worth mentioning is that there’s no governing body managing the investment property industry. So perhaps look for a company who uses FSA-regulated finance partners. This way you’ll have the peace of mind knowing that a trusted relationship is in place between the partner and property company.
Once you’ve decided who to approach, a reputable company will talk you through your requirements and then discuss what options you have. If they go in for the hard sell straight away steer clear – they’re not interested in getting you the best deal, just closing the deal and getting their commission.
Good property consultants will want to understand your circumstances and will help you ‘firm up’ your strategy and put it into action. They will advise you on the best opportunities, including the different finance stages, supply you with all the relevant investor data and then it’s down to you to make the next decision.
Securing further properties
Once the figures stack up, you’ve had all your questions answered and are happy to proceed, you need to take your commitment further. Generally this process follows a certain pattern:
• You confirm you’re happy to proceed
• You sign the relevant documents and pay a fee to secure/reserve a property
• You visit the development/property
• Again you confirm you’re happy
• Legal documents and contracts are signed
• You pay for your property – if you’re buying off plan you’ll only need to pay a percentage of the agreed cost until it’s built
• Then finally you can use your property to reap the rewards!
All forms of property investment should be viewed as a medium-to-long-term commitment which means a minimum of five years. ‘Flipping’ is a term used to describe selling your off plan property before completion – this was popular several years ago for making a quick profit, but it’s very risky. Buying off plan gives you a great discount to begin with, then you’ve got to wait until it’s built before you can obviously rent it. Buying key in hand property means you can benefit from a rental income straight away. Either way, the longer you keep hold of your property the more capital growth you’ll achieve.
Your commitment and dedication can be as much as you want. Obviously during the first few weeks of committing to a deal you’ll need to spend a fair amount of time signing and sealing the proposition. Property investment is flexible to a certain extent, if you’ve got little time to spare but you want to rent out your property you can get managing and letting agents on board to sort it for you. Involving a third party obviously means they’ll want a cut of your profits, so dealing with this yourself will be more cost-effective but time consuming.
Don’t miss part three of ‘how property investment can work for you’ next week.
Anne Kelly is the editor of Equity Property Portfolios. For more information please contact Equity Property Portfolios by visiting http://dentistry.co.uk/equityform/