Top Tips to Becoming a Successful Property Investor

publication date: Nov 20, 2008
 | 
author/source: Kate Faulkner
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Over 25% of people are now relying on property to support them financially in their retirement. The BBC reported that one of the Top Ten careers people wanted to pursue was property development. Kate Faulkner, property expert and author of Which? Property Investment Handbook answers crucial questions which reveal the secrets of becoming a successful property investor.

Prefer to watch the Q&As on video? See Kate being interviewed by Sarah Walker, presenter of BBC's To Buy or Not to Buy

Q. What do you need to consider to be sure that property investment is right for you?
A. There are three key considerations before you decide to invest in property. Firstly why are you looking to invest? Is it for retirement or to put your kids through college? This determines how much you will need to invest, what type of investment might be right for you and how long you have to make your money. Always check though that property investment is right for you by comparing the returns versus other financial investments you could make, such as a pension.

Q. How much money do you need to invest in property? 
A. This depends on type of property investment you make. For example if you invest with others in a property fund, then the minimum investment is likely to be around £5,000. If you invest with others to purchase property via a syndicate you are likely to need at least £20,000 and if you are looking at buying a property you are likely to need at least £30,000 for a deposit and cover buying fees.

Q. What are the first steps to work out how to invest in property?
A  The first thing is to be clear why you are investing in property versus other ways to invest money such as stocks and shares, or even gold or wine. Secondly you need to understand all the different ways to invest in property from residential buy to let, renovation to commercial properties, land, self build, property conversion etc. Next you really need to understand your attitude to risk. Property is usually seen as a 'low' risk investment, but it isn't it's typically a medium risk, and can only be lower risk if you hang onto the property for a long time, such as ten years plus. Finally you need to appreciate that property investment can take weeks and months to source and then need looking after while you are investing. Have your really got the time to focus?

Q. How much money can you make?
A  There are two ways of making money from property - rental income and capital growth. Rent can generate anything around a 4% gross return through to 12% depending on what type of residential/commercial property you are letting. Capital growth varies dramatically from zero to 30% or more.

Q. When is the best time to buy?
A. With any financial investment you make your money when you buy – and the lower you buy at, the better return you are likely to make as long as prices rise! Often the best time to buy is when there are more sellers than buyers, so typically it's worth investing when property prices are falling, rather than rising. However, you need to do weeks of research to make sure you buy at a good discount to make your money when prices rise.

Need help with a property problem? Why not call Designs on Property for independent help? You can contact us on 07585 897128 or email your question to enquiries@designsonproperty.co.uk


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