So, what do you look for when searching for an investment to sell or rent? Of course, what I look for might not be the same as you would, because I look for properties which suit my area, personal likes, rental potential and strategy.
What follows is my own strategy for investing- a two step process:
- retain enough property with maximum tenant levels to provide me enough cash to float my monthly outgoings with some extra;
- buy renovate and sell extra property for further cash flow.
'Simples!'
I do feel that some folk like to over complicate investing, or they simply get stuck in the 'empire building' mind set. Remember, lots of property equals lots of tenants and lots of potential management issues - is that what you want to do for a living? Personally I like an easy life, and hoards of tenants does not make for an easy life ;-)
Renovation Is Key
I also prefer to renovate all the properties that I buy, sell or rent. I renovate them to a good quality standard which does not break the bank but is also robust enough to handle family or rental life. The advantage of renovating is that you get to know the 'bones' of a house, so if things go wrong at a later date regarding repairs, you can usually get a good idea of what the source of a problem might be.Often this can mean simple fixes rather than having to call in the professionals every time, saving both money and time. 
I am probably a little unusual in that I don't leave them as bland magnolia and white boxes! I put feature walls in each room-even if I plan to rent it.
This lifts me above the competition when renting out or selling. I also make video tours of the renovation and finished result which comes in very useful for marketing purposes. My Own Top 5 Criteria
1. Know The Area
2. Know The Locals
3. Work With The Style Of The Properties In Your Area
4. The Cost Versus The Profit Margin ( long or short term)
5. The Expected Exit Strategy
.....lets break them down to....
The area & locals- to me this is of paramount importance and goes hand in hand with point 2- the locals. In investing circles the area and locals are known as the demographic. Or as Sarah Beeny might say "what's your target market?" Getting this aspect right is extremely important. The more you know about the types of people who live in your area the easier it becomes.
My own target demographic is as follows:
- Very good area schools (- requiring teachers-one target market)
- Local Uni (another target market-lots of students of all ages)
- Several big local employers (local hospital and financial institutions- needing workers in certain age groups)
- Easy and good transport links
- Lots of amenities
- House stock at affordable level for the investor
- Traditional style housing stock (-larger spaces and easy to convert/rent and sell well)
What the list above shows clearly is the DEMAND for property, whether that is rental or purchasing. There is a good mix of families, young population and older generation. In our area, the killer combination is the amount of great schools/ Uni and large employers that are evenly spread around. These all provide one major aspect- tenants or buyers.
The Housing Type/ style- the areas where you want to rent, buy or sell must be affordable with 3+ bedroom houses. Our area has lots of older housing stock with multiple reception rooms. More rooms means more flexibility as to what you can do to a property to make it more 'valuable' either to buyers or tenants.
Cost V profit- a pretty obvious one really. Some investors have a fixed margin or percentage that all their property must fit into ie: cost to buy, potential sale price, max cost of refurbishment and eventual sale price equals x % profit. Personally I know within a few minutes of walking in to a property if it fits for me-in some case I will know before I go and viewing is just to confirm potential costs to myself. I already know what my team of trades are likely to charge so I can make a good guess at the costs. If you are inexperienced or unsure- then get your builders etc to view with you.
Exit strategy- this is hugely important. For example; in a renovation we did 2 years ago just before the market crash we knew the market was turning as we were purchasing, so although we bought with a view to sell after development, we renovated in such a way as to appeal to a multi let renter too. In other words we had TWO exit strategies, further safeguarding our money and asset. Job done.
In my second article we will take a more detailed look into what type of properties to view for renovation projects. Watch for part 2 in the next newsletter.
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"Hi I am Roberta Ward and my company – My Property Mentor started life as a help site for landlords and new investors to learn about property investing safely, away from the ‘get rich quick’ mentality of some of the larger clubs and marketeers. By way of 1.2.1 mentoring and networking events I spent time helping others.
We are currently involved in an a much larger event in Essex called be2campeast, which is revolutionising tired networking formats, and something we are very proud to be asked to run. Alongside that, the company has moved into the promotion of ethical money and property investing.We are heavily involved in social media promotion and are full time investors running our own portfolio and renovation projects."
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