1. What Kind of Investment are you Looking for?
Do you want a property that will just sit there and collect rent? Or would you rather have a property that will provide an income stream for years? Do you want something with good cash flow but will require work from time to time? Or do you just want something that provides passive income?
Once you have decided on this, it will help you determine what type of property to purchase and whether a fully-managed letting service is for you.
2. What’s your Budget?
How much can you spend on an investment property? It is extremely important to factor this in at the beginning of your investment journey.
Your budget will determine the type of home and the areas that will be best to invest in. It is best to talk to an experienced letting agent in the area to help you get the best investment from your budget.
3. What Purchasing Costs are Involved?
There are a number of set-up costs involved when buying an investment property, and it is important to factor these in. These are the main costs to consider when buying an investment property:
- Deposit - Most lenders require a minimum deposit of 25%, but you may decide to put down a larger amount to get a better interest rate on your mortgage.
- Stamp Duty Charges - The Stamp Duty charges have changed in September 2022, read our guide to find out the new costs incurred.
- Legal and Conveyancing Fees
- Mortgage and Valuation Costs
- Renovation Costs
If you are deciding to offer your buy-to-let property as a fully-furnished property to renters, you may also have to factor in buying furniture.
4. What’s your Timeline?
How much time are you willing to invest in your property? You will need to keep up with the property and make any needed repairs, so if you don't have the time or inclination for this type of maintenance then consider hiring a property manager.
However, some investors prefer doing all of the work themselves because it can help them keep outgoings lower, but don’t forget that your time is an asset too.
5. Can you Afford to Manage the Property?
When you buy a property, whether as an investment or otherwise, there are many expenses involved. From paying for maintenance and repairs, to taxes and insurance, there's no denying that owning a home can be expensive.
If you're going to buy an investment property in Northern Ireland (or anywhere else), make sure that you'll have enough money set aside to cover those costs before making an offer.
6. What are your Goals?
Are you looking for a long-term investment or just something that will provide income from time-to-time? If you're looking for something passive, consider investing in a property that has good cash flow and can be rented out easily.
Before you invest in anything, it's important to have a plan. You want to be sure that the investment will pay off and that you won't lose money on it. If you're not sure what kind of property would work best for you, consider consulting with an estate agent or financial advisor who can help steer you in the right direction.
7. Will this Property Generate Positive Cash Flow?
A property that generates positive cash flow means that the rental income from the property is greater than the amount of money you have to pay off your mortgage and other expenses.
Depending on which area in Northern Ireland that you choose to invest in, you may want to invest in a family home in a great school catchment area or an
apartment in the bustling city of Belfast. This largely depends on your goals, we advise discussing these with an experienced, local letting agent.
8. Is there Room for Future Appreciation?
The best way to determine if your investment will be worth it is by looking at the current market value of similar properties in the area. If you can find comparable homes that have increased in price over time, then this could be a good indication that your property will also increase in value.
Ask your local estate agent for information on the up-and-coming areas within Northern Ireland. This is the best way to get insider knowledge on the best areas to invest in and which are more likely to increase in value over time.
9. How Much Time Do I Have to Fix Up and Sell the Property?
This is another important question to ask before purchasing a rental property because it can help you determine whether or not this investment will be profitable for you. If you need to put in a lot of work fixing up the house so that it becomes presentable for tenants, then this could take up your valuable time and cause delays in getting a tenant signed.
This could also mean that you will have to pay for repairs and renovations out of pocket. If you don’t have a lot of time to fix up the property before getting tenants in, then this could be another reason why rental properties are not a good investment for you.
What’s Next?
If you still have any questions or want to take on the next steps on your investment journey, our friendly and experienced staff are always willing to help. Why not give us a call on 028 9065 3333, or check out some of the properties we have up for sale at the moment?