A question I am sometimes asked is ‘how do I know what type of property to buy?’ which is a great question. The starting point for me would be maybe a bit of a convoluted process, but I think it’s really important to get the foundations right.
Firstly, sit back and consider why do I want to be a property investor, because there is going to be particular goals and aspirations and results which I want to get out of property.
The next stage would be to select the right strategy. In selecting the right strategy you’re then going to start getting a clue as to the type of property that you need to be buying. For example, if my goals required it, it may be that I’m looking for a buy to let property. If I was going to buy a buy to let property, because of the particular strategy which I use in buy to let, I would be looking for a cheaper property in a cheaper area which needs some work doing to it before I can do a refurb and add some value. If you’ve watched any of my videos, you’ll know why I do it that way.
But it may be, for example, that your strategy means, because based on your goals that you need to make a lump sum of cash quite quickly. In which case I might be looking for a property to flip. If I was buying a property to flip I wouldn’t be looking for a cheaper property in a cheaper area.
Why? Because a cheaper property in a cheaper area isn’t a flip property. It’s going to take longer to sell and there’s going to be less of a demand for it because what I ideally want to do with a flip is to sell a property to an owner/ occupier. An owner/ occupier wants to buy the property now.
I wouldn’t be going for the most expensive property because there’s a smaller demand, there is more limited market for the most expensive property in any area.
But there’s a sweet spot. It’ll be a property which will be good for maybe a first-time buyer or a second time buyer, so it won’t be the most expensive, but it’ll be more expensive than a typical rental unit.
So again, by knowing what I’m trying to achieve and by knowing the right strategy that will help me to decide the type of property I need to be buying.
Here’s to successful property investing.
Peter Jones
Peter Jones B.Sc FRICS
Chartered Surveyor, author and property investor
thepropertyteacher.co.uk
PS. By the way, I’ve rewritten and updated my best-selling e-book, The Successful Property Investor’s Strategy Workshop, which is an account of how I put together my multi-property portfolio, starting from scratch and with no money of my own, and how you can do the same.
For more details please go to:
thepropertyteacher.co.uk/the-successful-property-investors-strategy-workshop
