Once you have decided that you 100% want to invest your hard-earned cash, the next step is to look at where exactly you want to put your money. Location is key for property investment, and you want to invest where you will earn regular income whilst seeing your property rise in value simultaneously.
In today’s article, I will be outlining exactly what to look for when identifying a prime property investment area in the UK.
Investing in an area with a booming economic strength is infinitely better than one that doesn’t. Plenty of jobs and a large population to contribute economically means there is a high demand for property in the city and more people continue to travel and work there. This means that, even if a tenant of yours decides to leave your property, there should be a long list of potential replacements that will keep your void periods to a minimum.
A city with a strong economy is also highly likely to experience capital growth on property, a fundamental requirement for many Buy to Let property investors.
Plenty of regeneration
If the city you’re considering maybe doesn’t have the strongest of economies, then take a look at what is being done in the area. Is there money being pumped into the city in an effort to boost it’s economy and make the city a more desirable location to live in? If so, this may be the next prime property investment area.
Government led initiatives and local council efforts all go towards improving infrastructure, transport links and facilities within the city itself will all increase the demand for property near all this happening. The higher the demand, the higher prices will rise generally speaking.
Low supply of property
The basic business principle of supply and demand applies to property investment hugely and forms the backbone of any investors criteria when identifying a location. Major UK cities such as Manchester, Liverpool, Leeds and Glasgow are prime locations to invest in because of the fact that demand is incredibly high yet there is a supply shortage of properties being built in these cities.
Any property near necessary local services (I’ll get to those soon) will face a high demand as everyone wants to live in close proximity to them. The massive disparity between supply and demand is felt nationwide, but in these locations specifically, the effect is felt strongest. Therefore, these are the ideal property hotspots for any investor looking to achieve capital growth.
Easy access to local services
Prospective tenants will want everything close by and understandably so. After all, no one wants to have to drive for an hour just to get to the nearest supermarket. Investigate the local area where you are investing and make sure it’s got easy access to:
- Convenience shops and supermarkets
- Bars and restaurants
- Leisure centre
- Parks and green spaces
With all this nearby, your tenant will be happy, and you will have little to no problem letting out your property quickly and on a sustainable basis.
Check growth levels in areas
It can be worth looking into a location’s growth levels over the last few years to see if the area has a history of capital growth. A quick Zoopla or RightMove search can tell you how much house prices have increased over the last year, 5 years, decade and beyond. You can cross reference articles from years ago predicting property growth in certain areas with your own search to see if growth is actually occurring in the area you’re considering investing in.
Following these general rules of thumb should enable you to find great property investment locations that are prime areas to put your money into. The two main goals for any Buy to Let investor are securing a good rental yield, and also good levels of capital growth. Doing your research into your potential investment area should pay dividends for you with regards to these two goals.
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