PUBLISHED: 12:11 17 January 2013 | UPDATED: 22:38 20 February 2013
This month's property expert, Dean Jackaman NAEA, guides us through investing in property.
With banks failing us and pensions and savings schemes coming up short or offering a measly 2% return, its no surprise to see that a booming lettings market has made buy to let property the hot topic. Many people are now turning to buy to let as the only way to guarantee some income for the later years, but where do you start?
Firstly, do your research. Ask your friends and family if they have any investments and where? Then use the internet to search for new developments as well as the second-hand market to compare prices. Talk to an independent financial advisor and discuss how much cash you want to spend and if you should inject all of your cash or split it up and buy several investments on a buy to let mortgage. Call several letting agents first and see what the demand is for the property in the area you are considering.
Get an idea of costs and charges from the agents, from finders fees to fully managed charges. Dont forget, if you are buying a leasehold property you need to factor into your costs any service charge or the ground rent. It is very important to take your time and not to rush into it. Dont be forced into a snap decision by over enthusiastic sales staff or agents.
The average yield on a buy to let across Essex and into east London is around 5%. However, in letting hot spots, like around Essex University, the yields can reach up to 9% subject to the price you pay. Remember, capital growth is also very important in the long run and buying a property with the X factor is not as important as getting the right price. If you can, look to base your decision on a seven to 10-year plan.
- Do your market research first. The internet is a powerful tool, so use it!
- Do your figures before you make any offers. You could save yourself thousands!
- Alwayscheck the rental opportunity of your investment. Is it in a popular area? Does it have year-round demand? Is it close to a station or other amenities?
- Get good advice from a recommended letting agent or investment company or consultant you can trust. Ask them to support the rental figures and popularity they may claim with hard evidence.
- Buy anything on a whim or someone elses recommendation without checking it out thoroughly first.
- Pay full asking price for anything brand new or second hand unless it is at least market value or below market value.
- Buy anything that requires lots of work if you know you will never have the time to do it?
- Take on a tenant who has not been thoroughly referenced by an independent referencing agency. Make sure you get a landlords rent guarantee from the agent.
- Rent to a tenant without a minimum of six months deposit or bond and make sure you read up on deposits. You can find out more at www.depositprotection.com
- Never buy all of your investments in one area as demand can change.
Get in touch
For free advice on investments in Colchester, get in touch with Dean Jackaman at:
Jackson & Co Property Services
Weston Business Centre
Weston Homes Hawkins Wharf development in Colchester offers high quality, affordable homes close to the University of Essex campus and has proved to be a great investment opportunity.
Dean Jackaman NAEA is well placed to advise you in any area of land or property purchase. With 33 years of experience in the industry, Dean now specialises in the buy to let investment market within the student and medical sector. Dean also runs a very successful property lettings and management agency in Colchester.