Firsty, thank you for taking the time to read this article, it is my first for the platform so fingers crossed it adds some value to you! (I do have to state that none of the content within this article can be or is financial advice)
A little about my background, just so that you know you're not wasting your time reading something from someone who hasn't actually done anything in property. I bought my first property at the age of 20 using investment from family friends. It was a small BTL (Buy to Let) and was rented to a young couple who are still in it today. That property produced £625 PCM rent and after a full refurbishment had gone up roughly 60% in value (from £83k to £140k). I continued purchasing BTLs for a couple of years and then transitioned onto bigger properties and multiple flats in blocks. This is the strategy I am currently running with and it seems to be paying off!
Although many people getting started in property want to rush to the bigger, better, nicer stuff it is so important to get the first couple of BTLs out the way first. To that end I thought it would be appropriate for my first article to be exactly that - getting started - how do you get that first one.
For me the buying process is easily split into 5 main steps:
5 steps that you must take in order to achieve a solid property purchase. Do you have to do all of these each time you purchase property? Easy answer - no. However if it's your first one then 100% the steps are all needed.
I'm going to be doing a number of articles where we go into much more detail about each of the steps above (not sure when but they are coming).
So what do each of these steps actually entail? Here comes the top level detail:
Step 1) Find an area. From my experience property works best if you know your patch like the back of your hand - there is nothing wrong with you moving patches and growing those patches into pastures but you need to find a patch first. For me, I needed to know what I was investing into and on your first one you are most definitely investing in an area not just a property.
So how do you find an area? For me I picked 20 areas on a map, randomly and worked my way down to one. I wanted a population of around 20,000 people or more to ensure there was a variety of tenants to rent my property, I wanted low crime statistics, I wanted the government/local councils to be investing in the area to ensure capital growth and many more things. All of these elements you can find out about an area in around a couple of hours if you focus. It involves a lot of googling but it's easy enough. Again I will detail this in another article as there are some hints I can provide.
Step 2) Find properties. Literally just looking and saving on rightmove. Take the area you have chosen and spend at least 20 hours on rightmove looking through the different property types, look at sold prices, look at the value changes, how long properties have been on the market, work out what estate agents deal with which properties and also look at rental values to give yourself an idea of what different types of properties go for around your area.
If you find some properties you think look decent and might be a good investment then save it (I'm going to do another article on what makes a good investment but there will also be some top level calculations in step 4).
Once you have a significant saved list start researching providers in the area, builders, letting agents, solicitors. Look at where they are, what areas they service and what they can do.
Step 3) Contact every provider you have found and talk them through the properties you have saved. Talk to as many people as you can. At this point in time you will be trying to build your team. If you are going to be successful in property you are going to need help from people and you are going to need to pay for services. Having people you trust and suppliers/providers who can actually have a positive impact on your journey is really important. So to that end, interview them. Interview as many providers as you can. The better support network around you, the easier this property investing stuff will be.
I suggest at this stage trying to find a good solicitor, mortgage broker, accountant, letting agent for your area, builders and project manager and even estate agents. Your network is your net worth and having a solid team to help you move forward is the basis of any network.
Step 4) The property! Boom, your team is up, running and ready. So now it is time to find the property. How do you do that? I hate to say it, more research, more rightmove/zoopla. There are several ways to find property (another article coming) but the main ways are still through estate agents and through rightmove/zoopla/onthemarket. Go through your saved list and have conversations about each individual property with your team (if they are worth their weight they will have time to discuss this with you). Get their opinions but do your own research, below are the main things I look for when buying a new property
ROCI (Return on Cash Invested)
CF (Cash Flow)
Refinance value
Cost of refurb
Cost of purchase
Total project cost
Nearby sold values
(All to be explained in yet another article)
Once you have details on all of those elements you can make rational decisions on which investment will be the best one for you.
Step 5) Taking action. Step 5 is putting in the offer and kicking off the legal process to actually buy the property (Again - another article). If you have applied the first 4 steps correctly you'll have a good area, you'll have good property stock, you'll have a solid team and you'll have a good property!
Hopefully, this article has given you enough information to start thinking about getting into property. As said multiple times in this article there will be many more to come.
If you have any questions then please do feel free to reach out. I am more than happy to have a chat about property to anyone!
Hopefully hear from you soon or see you in my next article! Happy investing!
Joseph John Williams.
Thank you for taking the time to visit my profile.
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