Property investment tips, the kind worth having, are decisions about figures rather than sayings: which area to work, which type of property to buy there, what the rent really is from the comps, whether the deal stacks on cash after everything, and how to keep the record so the next deal starts from the last. The best type of property to invest in uk investors ask about has no single answer, because a two-bed flat, a three-bed terrace and a house in multiple occupation are three different businesses with different tenants, voids and costs. This page sets out the decisions in the order they are made and the figure each one turns on.
Decide the area from the map, then forget the map
An area is chosen off a yield map and a house price index, for the gap between what things rent for and what they sell for, and for whether the investor can get there when a boiler fails. Once the area is chosen the map has done its job: every deal after that is read from the street's comps and the property's own figures, not the district's average. An investor who keeps reading the map at the property level buys the average house in the best-looking district, which is rarely the best deal in it.
Decide the type of property from the tenant, not the price
The best type of property to invest in uk investors can find depends on who will rent it. A two-bed flat near a station rents to a couple who stay two years and leave it tidy; a three-bed terrace near a school rents to a family who stay five and want a garden; a house in multiple occupation rents room by room to people who stay a year and need more management. Each has a rent per square foot the comps will show, a void the agents will tell you, and a management cost the investor either pays or does. The type follows from which of those businesses the investor wants to run.
Work every deal from the comps, appraise it on cash, and keep the file
The rent is worked from three lets in the street per square foot, and the rent comparables sheet on this site does that with the range shown. The deal is appraised on the cash it leaves each month after finance, letting, management, maintenance and the void, and on the cash it takes to buy. And every property looked at is kept with its comps, its area figures, its appraisal and its offer, so that a hundred listings a year become a record. Yieldzo Pro keeps that file; the tips above are what it is for.
Questions people ask about property investment tips
What is the single most useful property investment tip?
Work the rent from the comps before you believe it. Almost every bad buy-to-let purchase was appraised on a rent somebody said rather than a rent three lets in the street supported.
Is a flat or a house the best type of property to invest in?
Whichever tenant the investor wants: the couple, the family or the sharers. The comps show the rent per square foot for each type in a street, and the agents will tell you the void; the choice is made from those two figures and the management the investor is willing to do.
How many deals should an investor look at before buying?
Enough that the comps and the appraisal are routine. An investor who has filed twenty deals in one postcode knows what the twenty-first is worth before the viewing, which is the point of keeping the file.