5 Steps to Finding a UK Property Investment

How you can find and buy an investment property.

Photo by Ben Allan on Unsplash

Step 1 — Decide a Target Market

The first thing to consider is to think about who you’re looking to rent to. Students, families, young professionals. All of these come with different needs. If you don’t consider your target market, you might end up buying a property that doesn’t fit your tenant’s needs.

  • They may not drive, so should be able to walk to shops.
  • They will want to be close to their school.
  • If sharing between multiple students, communal space will be important as well as areas for private study.
  • Will want a stylish, walk-in quality property.
  • Will want to be close to local transport links, like train stations.
  • Usually at least 2 or 3 bedrooms.
  • Will want a bath and garden for the children.
  • May need things like space for a buggy, extra storage.
  • They may have two cars, so will need parking availability.

Step 2 — Decide Your Budget

The next step is to create your budget. There are going to be a bunch of expenses that you will need to consider when thinking about how much you can afford. A typical list of expenses is as follows:

  • Tax (Stamp Duty or LBTT) — Also a percentage of the purchase cost. There are various stamp duty calculators online. Depending on where you live, this will be at least an additional 3% of the purchase cost.
  • Legal Costs — You can get conveyancing done for under £1,000, but from my experience, these tend to be poor service. You should expect to pay between £1000 to £2000 depending on the value of the property.
  • Renovations — This is very much dependant on the property. New kitchens, bathrooms, carpets, redecorating. All these items cost money and you should consider what your budget is for doing work to a property.
  • Mortgage Fees — Most of the time these can be added to the loan, but it’s worth noting that product fees can be £2,000+ for buy-to-let mortgages.
  • Letting Agent Fees — If you’re planning to use a letting agent to find tenants, then you should also consider their fees. They typically range between 5 and 10% of the rental income, depending on the level of service they provide.
Investment Property Purchase Price Examples by Ashley Sole

Step 3 — Finding an Area

The next step is to find an area where you want to buy. Many investors decide to buy property in areas they know and live in. In general, this is great advice. If you have personally lived in an area, then you will know the good streets from the bad. But it’s not necessary to have lived in an area to decide whether it’s a worthwhile investment. You can gauge whether an area is a good investment opportunity just by visiting and looking around.

Step 4 — Finding a Property

Once you’ve decided on a target market, a budget, and an area, the next step is to find a specific property. In the UK, this means trawling online marketplaces such as Rightmove and Zoopla. These are a good first step, but it also pays to reach out to some local agents to get on the books as an active buyer. Some of the best deals get sold before hitting the online portals.

Step 5 — Commit

The final step is to actually make an offer and buy a property. Once you’ve created a shortlist of properties that meet your criteria, set up some viewings and make some offers. This is by far the hardest step as it involves overcoming your hesitation and taking the plunge.

  • £1,250 rental income per month
  • £300 per month in mortgage interest (assuming a mortgage rate of around 2% which are widely available at the minute)
  • £100 per month in additional expenses (insurance and such)
  • £100 per month letting agent costs

Top Writer in Parenting | Stay at home Dad | Writing about life, money and parenting | Email me — ashley.sole@hotmail.com

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store