5 Ways To Find The Best Property Investment Areas

Whether you’re buying a property investment in the rental sector, or to sell on within the residential sales market, you’ll be looking to get the best return on your investment. So how do you go about ascertaining the best property investment areas to target?

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We take a look at the top five factors to consider before investing in property, and the questions you ought to be asking yourself to ensure you’re looking in the best property investment areas for your money.

  1. Local Trends

  • What are the current cost trends in the region?

  • Are housing prices here rising quicker than other regions?

  • What is the average cost within other neighbouring towns, and how does your town compare?

It’s worth starting with a broad area you’re hoping to target, and zoning in from there on the best property investment areas to focus on.

  1. Indications of Growth

  • What new infrastructure developments are being constructed in the area (schools, transport networks, shopping areas)?

  • What industrial growth is going on (businesses putting down roots, new job opportunities)?

  • What residential regeneration projects might you be able to get in on?

Spend some time in your desired area, and do plenty of research into what’s going on at ground level. Where there are concrete signs of development for the future, there is opportunity, as potential buyers (or tenants) flood to the area for work and leisure.

  1. Tax Implications

  • What is the tax charge likely to be?

  • How are property taxes likely to increase in the near future?

It’s a good idea to have a chat with a local tax assessor, and gain some trustworthy advice from a tax expert. Find out about tax structures, and any that will specifically apply to your area.

  1. Schooling

  • What are the OFSTED reports of local schools?

  • What do the GCSE and A Level results look like of catchment area secondary schools?

  • What family demographics dominate your desired area?

Any families looking to buy (or rent) a property are very driven towards areas in catchment for the best schools. In many cases, good catchment areas are reflected in the house prices in the area. Schools are a key factor that indicate the best property investment areas to focus on. Don’t underestimate the value that parents place on where their children will be educated.

  1. Outlying Regions to Cities and Towns

  • What are the transport networks like from outlying towns and villages into the main city/town?

  • Where are the job opportunities for those likely to buy in your desired area?

Whilst prices will be high, and supply low, within cities and affluent towns, some of the smaller towns and villages in the outskirts can be particularly desirable.

Rural areas where public transport is less freely available are actually more desirable for many buyers, where village schools are often well-appointed, and space and scenery make a pleasant contrast from working in the city, are very desirable. Such rural regions are very likely to see high value rises over time.

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Understanding the market will help you identify the best property investment areas to target.

These five factors to consider are perhaps the best ones to implement if you’re hoping to generate an income from investment in property. As always, it’s best to do as much research as possible, and to seek as much expert advice as you can.


 

Happy 18th birthday Buy to Let mortgages…

…and thank you for our present – a predicted 11% profit for the next decade according to a recent report.

The findings from the report published in an article by The Guardian identified that with average annual returns of 16.3% (£13,000 profit) on each investment of £1,000 since buy-to-let mortgages were launched in1996, landlords have earned more than they would have done with every other type of investment. These are clearly superb returns.

The report has been timed to coincide with the new affordability rules requiring lenders to carry out detailed checks on potential mortgagee spending and ability to pay if interest rates go up, but buy-to-let investors will be exempt from these rules.

Landlords take one in seven mortgages, and since 1996, lenders have granted 1.5m mortgages worth £174bn to buy-to-let investors. You can read the full article here: http://www.theguardian.com/business/2014/apr/26/returns-for-buy-to-let-landlords-dwarf-other-investments

A decade of scant reward predicted for individual buy-to-let investors

The latest analysis by accountancy firm PricewaterhouseCoopers has revealed that UK buy-to-let investors can expect an average return of just 3% between now and 2025.The projected 3% return is calculated before tax, but does take ‘expected’ running costs into account.

Given that many buy-to-let investors were achieving returns of 7% less than a decade ago, PwC’s figures could make for disheartening reading for prospective investors. However, for those with sufficient funds and expertise, the analysis does suggest that including a housing investment as part of a diverse portfolio including riskier assets could strike the right balance.

At The House Crowd, through a mix of informed purchasing and cost-effective renovation, we are able to outstrip average buy-to-let trends and offer our investment partners a fixed annual return of 6% on long term rental projects. In addition, for those wanting short-term gain, our develop and sell projects provide a typical return of 12%-14%.

During a period of what seems like never ending economic doom and gloom, we are delighted to be able to offer investors an option that returns double the UK average – all without the hassle of finding, purchasing and maintaining the property.

The House Crowd is a brand new concept in property investment which allows people to invest small amounts via crowdfunding (for more information on the process, visit www.http://thehousecrowd.com/thehousecrowd//how-it-works/). We are committed to breathing life into empty, rundown properties whilst giving investors great returns on their investments (for more information about us, visit www.http://thehousecrowd.com/thehousecrowd//about/our-manifesto/). If you’ve read enough and want to invest now, visit www.http://thehousecrowd.com/thehousecrowd//invest-in-property/).

The Living Dead

Just been reading the book “Whoops – Why everybody owes and nobody can pay” which is all about the financial meltdown and the lack of credit available to business and home-buyers.

It has a chapter dealing with Zombie banks where banks are not killed off but neither are they able to flourish as they are forced to reduce their ratio of capital reserves to lending. They simply exist in a sort of limbo land – the Living Dead. Similarly, the newspapers have been discussing ‘zombie mortgages’ of late where home owners can’t refinance but will be in deep trouble when rates rise.

But, there are  ‘zombie landlords’ out there as well!  One magazine recently reported the case of a landlord who had £4m worth of BTL property from which he was making a net income of just £40,000 – presumably because he was so highly leveraged.  That’s just a 1%  return a year.  It’s inevitable that rates will increase at some point in the not too distant future, and when (not if) they go up by just 1%, this Zombie and thousands like him will be in deep doo doo.

Property investment advice from the House Crowd: focus on high yield properties with moderate leveraging (or, better still, none at all) so you are always in a positive cash flow position and so you can cope with interest rate rises when they come.

Joint Ventures Property Investment

I’ve just been lurking around the property investment forums such as Property Tribes. There seem to be some interesting discussions about joint ventures in relation to property investment but some scepticism about the partners involved especially as they all seem to charge fees in one way or another.

Not a true joint venture in my opinion.

Hopefully people will realise we offer a simple, transparent way they can participate in a genuine joint venture and invest in property for mutual benefit.