If you’re considering property investment as your next venture, you’ve come to the right place! Property investment in Liverpool can be a successful and profitable endeavour. Our guide has outlined all the basic things you need to know before starting your journey. Whether you’re a seasoned property investor or you’re just looking for more information, our blog covers the pros and cons of property investment, the vital things you need to think about and we even delve into holiday properties to let. To find out more, keep on reading!
What Is Property Investment?
Property investment is a profitable project that many people take on. The basic principle is that an individual will buy or mortgage a property, potentially remodel the inside of the property and then rent these spaces out. Both domestic properties, like flats and houses, and commercial spaces like office space can be bought and rented out.
Property investment is a long term strategy that allows individuals to generate passive income. While it can be a good investment opportunity, with a range of financial benefits, there are challenges that come with property investment. Keep reading to find out the pros and cons of property investments.
Pros And Cons Of Property Development & Investment
Before starting out your property investment journey, it’s important to understand the benefits and the challenges that come with this kind of venture.
Pros
● High Return On Investment - This is one of the biggest positives that can come from investing in property. You can create a high return on your investment provided that everything goes smoothly with your tenants and your property. For first-time property developers, it can be challenging to generate profit right off the bat, however in the long run, the financial benefits can be significant.
● Steady Income - When you rent out your property to someone, and it all goes smoothly, you have the financial security of monthly rent payments. These rent payments may go towards the mortgage on the property, reinvesting in the property or it can be disposable income.
● Control Over Investment - As the investor, you are in control of your property and the money it is generating. From rent and bills to choosing your property, remodelling and managing the rental, you are in full control of the situation. This means you have a great source of income which is not entirely dependent on external factors and you remain in control of your investment throughout.
Cons
● High Upfront Costs - Buying a property or taking out a mortgage (which requires a deposit) can mean that there are high upfront costs. You may not see a profit from your property investment for a while. If you decide to have renovations or other work done on the property, this will also be costly at the beginning of your property investment. For those who cannot afford the upfront costs and the potential for no return on investment for a few months, investing in property may not be the right call.
● Unexpected Problems Can Occur - Owning property is a good way to have a passive source of income, however it still involves ongoing tasks and maintenance. Unexpected things can break or become damaged, which the property owner will likely be responsible for. Emergency situations and property management are things that the property owner will still have to be aware of.
● Market Risks - The property market can fluctuate, with low prices to rapidly increasing prices. Additionally, properties tend to increase in value over time, however some properties may depreciate or go down in value, which can be a drawback for property owners.
Things To Think About Before Buying
Buying a property is a big commitment, and not a decision that should be made lightly. Before you buy a property, or make a big spend, there are some things to consider.
Plan Your Finances
Planning your finances is absolutely essential when it comes to property investment. You Will need to evaluate how much you are spending upfront, your mortgage options and other ongoing payments. You will also need to consider when you will start making a profit and what you will do with the return on your investment.
What type Of Property?
You may be deciding between commercial property or domestic opportunities. It’s important to do your research, consider your finances and weigh up the pros and cons of each. This will help you to make an informed and smart decision.
Location
Research different neighbourhoods and areas to see what the demographic is like, if it’s a safe area and if it is close to the centre. These are all factors that will impact someone who is renting, so it pays to put yourself in the shoes of someone looking to rent a place. What amenities and local shops are close to the property? Are there good transport links? These are important things to consider.
Property Condition
If you invest in a property that needs a lot of repairs and renovations, it’s important to factor this into your finances. Work within your budget and don’t spread yourself too thin. Evaluate the pros and cons of a property that needs a lot of work done.
Exit Strategy
This may not be something you have considered, however an exit strategy is essential. When investing in property, an end goal must be clearly set. Whether you intend to live in the property, keep renting or eventually sell, these end goals need to be clear so that you can continue to work towards them.
Holiday Rental Properties
In Liverpool, holiday rental properties are a popular choice for people looking to invest in properties. They are ideal for being close to the city’s tourism and thriving culture. People who are travelling or simply visiting Liverpool for a little break may be interested in holiday rentals, so that they can have safe and secure accommodation for their stay.
Holiday rentals are beneficial to renters because they are relatively flexible, cost-effective for bigger groups and provide a more homely feel in comparison to hotels. As a holiday rental investor, these are some things to consider:
Location Location Location
Choosing the right location for a rental property is essential, especially for those travelling to Liverpool. It is likely that groups or individuals who are looking for holiday rentals will want to be close to the city centre, near good transport links, in a safe area, near attractions and more. As an investor, you need to consider these factors when choosing a location as it can impact the popularity of your property.
Proper Maintenance
Managing a holiday rental will take some organising. From bookings, maintenance, cleaning and even communicating with your guests, staying organised is crucial. You may want to manage your property yourself, however some investors decide to hire a property management company as a third party. This third party acts as the middleman between guests and the owner of the property.
Legal Compliance
It’s important to be aware of local regulations and licensing requirements that you need for holiday rental properties. If you fail to comply with certain laws or regulations, you are more at risk of facing legal issues.
Property Investment In Liverpool
If you’re looking for beautiful rentals in Liverpool, look no further! Here at Lev Properties, our property investment firm offers a stunning collection of holiday rental properties for you to develop. Our team is thoroughly experienced and ready to help you through your investment journey.
If you’re interested in any of our properties or simply want to find out more, you can contact us here. Alternatively, you can call us on 07706364909 to speak to our team directly. We try to respond to all queries in a timely manner, so if you don’t get through to us feel free to leave a voicemail and we will get back to you as soon as possible.