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10 Golden Rules of Property Investment
With mortgage lenders tightening their criteria, the time has never been better to review the 10 Golden Rules of Property Investment. Sylvana Young, winner of Bradford and Bingley’s Property Woman of the Year 2008 (London) shares her top tips.
By: Young Group
However, since last September’s credit crunch, the cost of finance for the lenders has increased and they are reviewing their lending criteria, preferring to offer finance to investment opportunities that represent the cream of the crop.
The time has never been better to review the 10 Golden Rules of Property Investment and here, Young Group’s COO, and winner of the Bradford & Bingley Property Woman of the Year 2008 award for London, Sylvana Young, shares her top 10 do’s and don’ts for sound property investment.
1. Research, research, research – know the area you are buying into, regeneration plans and new tube stations are great indicators of up and coming areas and capital appreciation. Apply the 10 minute rule for access to transport links, bars & restaurants and local amenities.
2. Location – consider who your ideal tenants will be. To attract quality tenants you need quality locations.
3. Buy well – consider both price & content. Research prices in the area and look for comparables. Can white goods, flooring or furnishing be included in the purchase?
4. Make sure the numbers work – most wealth is created through capital appreciation, so buy a property that supports this type of growth. Ensure you include all costs in your financial projections (such as legal fees, stamp duty, service charges, ground rent, contingency to accommodate void periods between tenants etc). These costs are all too often ignored leading to negative monthly cash flows.
5. Appoint the right advisors – trusting your mortgage advisor is imperative. A regulated advisor can secure the best deals free from fees and aligned to your investment strategy. Good letting agents will minimise void periods. Remember that not all solicitors are off-plan specialists.
6. Don’t expect to ‘get rich quick’ – property investment should be approached with a long-term view. It is an asset class that in the medium to long-term has outperformed all other asset classes and I would encourage people to build a sustainable, appropriately geared portfolio over a number of years.
7. Never ignore the basics of supply and demand – speak to local agents to find out what’s needed in your chosen area. The markets for 1 bedroom flats and 4 bedroom houses do not follow the same patterns.
8. Don’t be influenced by your emotions – you’re not living in your investment so decorate and furnish at an appropriate level of quality. Speak to local agents to understand what quality is required. Don’t be tempted to furnish cheaply if you want to retain quality tenants.
9. Never be swayed by gimmicks – be wary of incentives, particularly ‘no money down’ deals, get rich quick schemes or developments where you are under pressure to sign up quickly to secure the ‘deal of the day’, and never buy an off plan / new property without the guarantee of either an NHBC or Zurich 10 year warranty.
10. Never pay over the odds - avoid paying finders fees, commissions or subscriptions to agents or advisors, particularly prior to completion. If the investment proposition is a sound one there should be no reason to pay up front fees.
Finally, remember anyone can buy property; your aim is to buy an investment that will generate long-term wealth. Chosen appropriately, there are plenty of solid investment opportunities out there for which suitable finance is readily available.
Communications Manager – Young Group
T: +44 (0)845 356 1000
About Young Group
Young Group specialises in providing Property Portfolio Management services to private investors, offering the best off-plan direct investment opportunities in London, as well as access to indirect, development fund investment opportunities through its development arm, Young Property. Young Group manages the entire investment process. For direct investments this spans from sourcing the opportunities through to financing, furnishing and letting. Young Group owns all the property that it sells, and also retains a number of units in each development for its own portfolio. As the principal in every transaction, Young Group does not realise any profits until completion and has transacted in excess of 1,700 apartments, with a retail value of more than £700 million. The majority of our units are bought by clients for their private portfolios. The Group's portfolio managers liaise with the Young Lettings (www.younglettings.co.uk)
Young Group clients have access to all available finance products via Young Group's FSA regulated mortgage desk, Young Finance (www.youngfinance.co.uk)
• Young Group's iconic Canary Wharf development, The Landmark (www.TheLandmarkE14.com)
• Young Group’s COO, Sylvana Young, has just been named Bardford and Bingley’s Property Woman of the Year, 2008 for London. The overall national winner will be announced on 13 March 2008.
Young Group supports NORWOOD and CHILDREN with LEUKAEMIA, two charities particularly close to our heart, donating £50 per property exchange and providing additional support throughout the year. Visit www.younggroup.co.uk to learn more.
Chief Operating Officer – Young Group
A qualified surveyor, Sylvana began her career specialising in commercial property with SEGRO before moving on to focus on residential property in 1993. Sylvana has experience of all aspects of residential development, including valuation, interior design, lettings and management having worked, amongst others, for DTZ Tie Leung in Hong Kong and The UK Valuation Office.
As Young Group's co-founder and COO, Sylvana oversees all operational aspects of the group as well as heading the groups’ Young Lettings and Young Furnishing businesses; applying her extensive knowledge of the property business to ensure that investors' properties generate maximum income. Sylvana also works alongside Young Group's property team to ensure that investment properties are selected and developed to match an area's demographic demand. Sylvana is 36 years of age, lives in North London and is married to co-founder and CEO, Neil Young. Neil and Sylvana have two young children.