What key factors make a good property investment area?
When considering where to invest, it’s not about the cheapest or most expensive properties. It’s about finding a location where people currently want to live or will want to live in the future.
Spotting up and coming areas
Many towns and cities already have a flourishing economy and a robust housing market. And these are good places to invest as they’ll offer a steady return in rental income.
However, some areas may have been in the doldrums in recent years. House prices are cheap because the economy there is not so vibrant. But if all that’s about to change, then now is the time to invest in property in that location while it’s still affordable.
What makes a location appealing?
If new transport links are about to be introduced or a number of big businesses have recently moved into the area, and more are set to follow, then this is a place that’s on the up.
The best performing regions for buy-to-let investments tend to be in urban areas. If developers are targeting a particular city for new builds, then it could be a case of following the money.
One type of investment tends to trigger another. For example, a huge corporation decides to relocate. The local authorities decide to improve transport links in that area. Property developers invest in creating new builds. Smart buy-to-let investors choose to purchase in this location.
Match tenants to your property
Now you need to look at what is bringing people to the area and find the right property for these type of tenants.
If a large university or educational institution is undergoing expansion or introducing new courses, then shared houses for students are going to be in demand. Alternatively, if the appeal lies in the quality of schools for younger children, then 3 to 4-bedroom family homes are going to be sought after.
If it’s a case of large corporations relocating to the area, then flats and apartments for young professionals are going to be a safe bet. You need to match the property to the people who are going to want, and can afford, to live there.
Close to home or further afield?
Many investors tend to stay close to home as they have first-hand knowledge of that area. It becomes easier then to spot the type of property that will do well as you already know what makes the location appealing.
However, don’t be afraid to cast your net wider. If you’ve read of a town or city that’s undergoing regeneration, then it’s worth seeing where that investment is coming from and why. If other investors have seen potential in that location, then why not follow suit?
At present, extensive regeneration is taking place in many northern regions with around £3.4 billion in growth deals dedicated to the Northern Powerhouse. With this amount of money being invested in business, transport and culture, people will be heading to these rejuvenated towns and cities – providing plenty of opportunities for the buy-to-let investor.
Would you like to learn more about property investment?
Register for our course: An Introduction to Property Investing
Our Property Investing Masterclass will help you to understand the different property investment strategies that you can use in today’s property market.
Dates: 29th and 30th March 2019
Venue: Renaissance Hotel, Heathrow
Book Now! limited to just 30 places