There’s no doubt that when it comes to financial growth and boosting your income, property investment is a fantastic route to take. Those investing in the UK property market can expect high rental returns and huge house price growth in some areas. While this can be a lucrative and rewarding path to take, however, property investors can also come across some issues that could disrupt the success of their venture. If you’re worried about facing these kinds of issues, don’t fret! Here are some of the biggest property investment problems that can arise, and how to avoid them.
Investing in the wrong property
Without proper research into the property market, you could end up purchasing the wrong type of property in the wrong location. Different property investment opportunities mean different types of returns. For instance, you might think that London is a good city to purchase buy to let property in. However, with low rental yields and dwindling property prices, you could be harming your chances of success. Think about the areas that have a good reputation when it comes to property, such as Liverpool and Manchester. These north-west based cities boast some of the best rental yields in the UK, along with attracting a high demand for rental properties and presenting strong house price growth.
Working with the wrong property company
If you choose to invest with a property investment company, be sure to do your research before you decide who you’re going to work with. If you invest with the wrong property company, you could fall for scams that claim to offer unrealistic returns and fake investments. There are signs to look out for to avoid investing with a bad or fake company. One signal is a company that advertises properties with rental yields that are way too high and not realistic for the area or property type in question. Other signs like multiple bad reviews, or no reviews at all, signal that a company should be avoided. Look for property companies like RW Invest, which tick all the boxes when it comes to finding a trusted company to work with. RW Invest has endless positive reviews, a detailed website full of informative content, and opportunities that offer high yields which align with the area in question.
After avoiding any issues that come with the investment process itself, you’re then often left at risk of further problems once you’ve found a tenant for your property. Issues like a tenant refusing to pay rent, doing damage to your property, or disrupting neighbours with noisiness and anti-social behaviour are unfortunately something many landlords can face. The most effective way to avoid this is with thorough tenant screening and by writing up a detailed tenancy agreement. Check for things like credit, current and previous employment, employment references and landlord references. This way you can take into consideration whether you think your prospective tenant is likely to afford payments each month, or whether they show bad signs such as hopping from job to job or having long periods of unemployment. In a tenancy agreement, make sure you put a deposit fee in place which will be returned at the end of the tenancy provided that no damage has been made to the property. This tends to be around one month’s worth of rent, and will hopefully encourage your tenant to be more careful to keep the property in good condition.