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3rd Feb 2025|Property Investment|

Buying An Investment Property Explained

Buying an investment property has long been a popular way to build wealth, offering the potential for strong returns and long-term financial stability. However, for newcomers or those considering re-entering the market after a break, it’s hard to know where to even begin.

Here at Centrick Invest, we’ve guided countless first-time investors towards building a thriving portfolio of buy-to-let properties that generate substantial yields, promote financial security, and achieve exceptional capital growth – we’re here to help you break down everything you need to know to buy an investment property, from identifying opportunities to managing your asset.

Why Consider Buying An Investment Property?

With plenty of investment options on the market, from stocks and shares to bonds and cryptocurrency, why should you opt to invest in the UK property market? 

Firstly, property investment is a time-tested strategy for generating income and building equity. Whether you’re purchasing a buy-to-let property or looking for a long-term capital appreciation opportunity, the UK property market remains one of the most robust in the world. With house-building targets being continually missed, and the UK population continuing to grow, demand for rental property is showing no signs of ebbing, hence JLL’s staggering forecast that the UK property market will see house price growth of 14% until 2028.

What’s more, cities like Birmingham and Manchester, have seen significant regeneration in recent years, making them attractive locations for investors. From the construction of HS2, to big businesses such as Goldman Sachs moving away from London and into other key cities, investment opportunities across the UK are abundant and certainly not restricted to the capital.

This isn’t to mention the fantastic yields that can be generated by savvy property investments – the likes of Manchester and Birmingham achieve yields of up to 7% in particularly popular locations, and provide more reliable and consistent streams of income compared to alternative methods of investment. 

Key Steps to Buying an Investment Property

Looking to get started by purchasing an investment property in the UK? Follow these 9 steps to set yourself on a path to property investment success!

1. Define Your Investment Goals

Before starting your search, establish clear goals. Are you looking for a specific amount of monthly rental income or long-term growth through property appreciation? Are you trying to diversify an existing portfolio, or dip your toes into the world of investing before expanding? Understanding your objectives will guide your property selection process and influence your budget.

2. Do Your Research

Knowledge is key to a successful investment – after all, not all regions offer the same yields and, not all neighbourhoods will generate the returns you’re seeking, even in popular towns and cities. Research different areas to identify high-demand locations with growth potential. Birmingham, for example, benefits from its strong economy, excellent transport links, and thriving rental market. However, neighbourhoods such as the Jewellery Quarter, Digbeth and the City Centre offer more lucrative yields than many other postcodes. Be sure to assess demand for individual neighbourhoods with a local property expert such as Centrick.

3. Set a Budget

Assess your finances and determine how much you can afford. Consider costs beyond the purchase price, such as stamp duty, legal fees, property management, and ongoing maintenance that will cut into your yields in the long term. If you’re planning to take out a buy-to-let mortgage, speak to a specialist broker to understand your borrowing options.

4. Find the Right Property

Selecting the right property is one of the most crucial steps in the buying process. Tools like property portals, estate agents, and property investment companies such as Centrick Invest can help you streamline your search, focusing on up-and-coming locations or regions with time-proven demand. Here are some questions worth considering…

  • Do I want to invest in an apartment and, if so, have I considered ground rent and service charge?
  • Should I take advantage of the student property market and invest in an HMO?
  • Who is the target demographic of my chosen area? Are larger houses suitable for families, or smaller apartments for working professionals the best avenue to pursue? 

5. Make an Offer and Negotiate

Once you’ve identified a property, it’s time to formally submit your offer. Don’t be afraid to negotiate—an experienced agent or property consultant can often secure a better deal for you. For example, those listing off-plan units may even be able to help you secure certain furnishings, fixtures or fittings as the unit is being constructed. However, the market is very competitive, so be prepared to act quickly to avoid losing out on your chosen property.

6. Arrange a Survey and Valuation

After your offer is accepted, it’s time to arrange for a professional survey to assess the property’s condition and ensure there are no hidden issues. Simultaneously, your lender will conduct a valuation to confirm the property’s worth and assess whether they are comfortable to lend funds to you to purchase the property if you are using a buy-to-let mortgage. These steps are essential to protect your investment and avoid unforeseen costs.

7. Legal Checks and Conveyancing

The conveyancing process is critical in transferring ownership of the property over to you. Be sure to collaborate with a qualified solicitor who will:

  • Perform legal checks on the property’s title.
  • Ensure there are no disputes, unpaid charges, or restrictions.
  • Draft and manage the contract of sale.

Throughout this process, stay in regular contact with your solicitor to avoid delays.

8. Exchange Contracts and Complete the Purchase

Once all of the above checks are completed and financing is in place, it’s time to exchange contracts. At this stage, you’ll pay a deposit (usually between 10% and 25% of the purchase price) to secure the property. Completion follows shortly after for completed developments, at which point you’ll take legal ownership, for off plan property you’ll need to work with your partner or developer around the completion date for your property. 

9. Plan for Property Management

Congratulations, your purchase is complete! Now it’s time to decide how you’ll manage the property – will you handle management yourself, or outsource to a property management company? 

Professional property management companies are a great option for those with busy schedules or a lack of experience as they can handle tenant relations, maintenance, and rent collection, ensuring a seamless and stress-free experience. However, many landlords prefer to be more hands-on, taking on this responsibility themselves – this is a particularly good option if you have a small portfolio or live locally to assist in times of emergency.

Why Buy an Investment Property with Centrick Invest?

Considering taking the first step towards investing in the UK property market? We’re here to help you get started!

At Centrick Invest, we simplify the property investment process, offering a wide range of high-quality developments in Birmingham, Manchester, Burton, Cambridge and beyond. Here’s how we add value:

  • Market Insights: Our team understands the nuances of local property markets and market forecasts, ensuring you make informed decisions.
  • Exclusive Developments: Gain early access to investment opportunities not available on the open market through our exclusive Investor Club.
  • Comprehensive Services: From compliance to property management, the broader Centrick team is with you every step of the way.

Join the Centrick Investor Club

Looking to take your property investment journey to the next level? The Centrick Investor Club offers exclusive benefits to help you succeed:

  • Expert Insights: Gain valuable knowledge about mortgage options, financing strategies, and ways to protect your investments.
  • Practical Advice: Receive personalised guidance from property experts, helping you build a robust portfolio.
  • Engage with Industry Leaders: Interact with top professionals and ask real-time questions during our sessions.
  • Network with Peers: Connect with like-minded investors and build relationships that could lead to your next big opportunity.

Don’t miss the chance to enhance your strategy when buying an investment property. Join the Centrick Investor Club today and unlock the tools for success.

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