Property Investment and Management Choosing a Property

Choosing a suitable property for your now growing portfolio is the next step now that you have identified your budget.

In property investment when choosing a property we would recommend a mixed portfolio. The reason being any potential falls in value or occupancy in one sector will be offset with continued performance in another. That is the theory.

Many investors feel more comfortable with residential property. Generally investors have had a relationship with residential property having resided in houses and therefore often feel more comfortable with reading the market for residential.

The returns tend to be good for residential but there is often more for the investor to do in terms of management. 6-12 month contracts mean a potential tenancy change every 6-12 months. Commercial tends to be for a longer term with fixed rent and with the tenants liable for all repair redecoration and insurance.

Using local agents

We would suggest signing up with local agents which ever type of property you choose. They often have knowledge of what is on the market but also what is likely to come onto the market.  They can also assist in overcoming some of the issues that come up during the purchase period.

Explain to them what you are looking for and let them do some of the work. They will probably have access to one of the many data bases available to surveyors that make searching for a potential property easier for them.

We would also suggest getting a local solicitor engaged so that you can move quickly once the property has been identified.

Funding

If you are looking at bank funding, the bank will engage one of their “panel” surveyors to carry out a valuation on their behalf. This will cause issues if valued lower than the agreed price. However it can also open a window for re-negotiating the deal if causing a problem. It is now a good idea to engage with the valuer, meet them on site and explain your plans for the property.

At this point you may need to instruct your own surveyor. They can advise on value and any current or ongoing repair issues or responsibilities. If you have chosen a commercial property, you may agree a Schedule of Condition. This is important to limit your potential repair obligations later during the term or on exit of the property.

The rest is in the hands of the solicitors. Your solicitors job is to protect your interests, we would advise frequent communication with them to ensure a smooth process.

Contact us if you have any questions office@jsreakes.co.uk

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