What You Need To Know If You’re Investing In Property

This is a post by Rosana about investing in real estate. 

After living, working and relaxing inside our homes and almost nowhere else for the vast majority of time since March 2020, it’s not surprising that so many people are looking to either move or invest in property. We saw it as soon as the first lockdown ended, with people rushing to get to somewhere better or take advantage of the surge in demand. But investing in property is something of a minefield no matter when you do it. You don’t need a pandemic to create a housing market bubble, and you don’t need to be rushing to buy to realize that you have missed a lot of problems that you wished you hadn’t. 

In short, investing in property is something that requires a lot of preparation, research and patience (that last point will definitely be tested!). It’s a process where the unexpected can and will find a way to make your life difficult, but here are a few things that you should know before you get started.

Find The Right Deal On Your REIT

If you are thinking of investing in group of properties, then it makes sense to look at a REIT investment. REIT stands for Real Estate Investment Trusts, which means that you make a single investment to invest in several different properties. If you’re doing this in the UK, you’ll be investing in an EFT (Exchange-Traded Funds), which will be managed by a larger organisation or financial institution. 

Now, there are many different types of REITs and many different types of EFTs, so before you start putting your money in you will need to have a clear idea of your investment goals and the specific market that you want to invest in. Do you want to diversify, or do you have something more focused in mind? Research is absolutely paramount here, so take a look at the top UK REITs before you get started. BuyShares has broken down what you should be looking for as well as the most enticing choices.

Always Ask If Now Is The Right Time To Invest

Anyone who has ever bought property before will know just how temperamental the housing market can be. For everyone who got their property at an incredible price and can’t believe they snuck in under the wire, there’s someone else who bought just before the bubble burst and overspent by a horrifying amount. Sometimes there is simply no getting around the changes in the market, especially when property is concerned. If you absolutely need to buy now, then you’re just going to have to find the best deal possible. But if time is on your side and you can afford to wait even a month or two if you feel like the property that you’re looking at is at a higher price than you’d like, then it may well be worth doing so.

The UK housing market is extremely competitive at the moment and prices have been rising at their highest rate since 2004. Part of the reason for this was that the stamp duty tax on property purchases had been cut last summer on a temporary basis and was reinstated at the end of June. The other reason is that people have reconsidered their priorities in the wake of the pandemic. That city centre apartment with access to great travel links is now far less prized than a spacious home with a garden. People want space, they want fresh air, and they are perfectly happy working from home. With that in mind, if you are thinking about investing right now you need to be more agile and well-prepared than ever.

Remember That Things Can Change In An Instant

This is one of those facts that people think they know but may not be truly prepared for. Investing in property is a marathon, not a sprint. But it’s also a transaction that involves two parties, and as much as you think you may know about the person or party you’re dealing with and what their intentions are, a property deal is never done until the papers are signed, and the money has changed hands. 

Everything is so up in the air right now, even as the government doubles down on its commitment to reopening. With the central bank carefully monitoring the inflation in housing prices, this is going to be a time when things can happen at lightning speed. You can’t strong-arm someone into a deal, all you can do is be patient, be firm, and know when to walk away. To be as safe as possible on your end, be sure to commission a survey of the property you’re looking at before you buy, in case the other party is trying to take advantage of the competitive rush.