STEP 1 – WHY DO YOU WANT TO INVEST?
Be clear on your goals – do you want a specific monthly income stream, is there a minimum you need per month, do you prefer to work towards a specific rate of return ( or yield ) or are you more focused on getting a property which might increase in value over time? These are all normal goals but you need to pick why YOU want to invest.
STEP 2 – DECIDE ON A BUDGET AND AREA/AREAS AND GET LOOKING!
Start looking, set up alerts through portals and keep an open mind! Photos are useful but don’t always tell the full story so viewing is vital. Remember the home report will tell you a lot about the property and also what the sellers are expecting to achieve (price wise!).
STEP 3 – VIEW THE PROPERTY
The exciting bit – view during the day so you can see what it’s like in the light – keep a close eye on communal areas, don’t focus too much on the decor or be fooled by furnishings, how are the windows, the heating system, electrics, kitchen etc because these are expensive to sort – a coat of paint is not ! Remember renting is heavily regulated in Scotland so meeting certain standards is essential. Are you happy doing some work on the property yourself or do you know tradesman who can help? Many people think getting works arranged is easy but getting good reliable tradesmen is much more difficult than you might think!
STEP 4 – BE CLEAR ON YOUR RENTAL MARKET AND HAVE A REALISTIC CLEAR IDEA OF WHO WILL RENT IT AND WHAT RENT THEY WILL PAY.
This step is so important – don’t listen to what the agent selling the property is telling you, get independent advice as to the potential rent of the property. Think about who will rent the property – is a family really likely to rent a 4 bed flat on 3 rd floor with no lift in town? Are you happy with students living in your property? Think about your target market.
STEP 5 – DO YOUR FIGURES AND ONCE YOU ARE READY, MAKE AN OFFER
Work out what your immediate expenditure will be, ongoing monthly expenditure (repairs, factor, second homes tax, solicitors fees, management fee if using an agent, vacant period allowance, tax impact) then once you are comfortable, make your offer! Remember to stress your position if you are a cash buyer and also if you are not in a chain (so have nothing to sell) – this will impact on any sellers decision.
STEP 6 – CONGRATULATIONS!
Let’s assume your offer is successful, the normal time from offer to completion is about 6 weeks. That’s means you’ve got 6 weeks to get the cash and get ready to get to work making sure your property is ready for a tenant! Use this time wisely to either line up an agent or prepare tradesman for works. In 6 weeks time, you will be a property investor!