Property is the world’s largest asset class. This year, it was calculated to be more valuable than all stocks, shares and securitised debt combined. As a result, it tends to be a hugely popular option amongst investors.

With the combined opportunities of rental income and capital growth, property has the potential to offer huge rewards to investors. In addition to this, as property is a “real asset,” investing your cash in bricks and mortar can help you take advantage of inflation, as property prices tend to rise at a similar pace.

But there are so many property investments to choose from, selecting the very best may prove to be a difficult task. As with all investments, your choices should be tailored to your needs, intentions and goals.

Hopefully, these “6 Quick Steps to Choosing a Property Investment Opportunity” will kick-start your journey in the right direction.

6 Quick Steps to Choosing a Property Investment Opportunity

1-Location, location, location

While this sounds like a cliché, a property’s location can have a huge impact on your investment. But before you decide on a location, you need to decide on your intention.

For example, what type of tenant do you wish to attract? If, for example, you’re investing in student accommodation, a university town could be a perfect match. Or, if you’re hoping to rent your property out to a family, you may wish to consider neighbourhoods near reputable schools.

Other important things to consider include the area’s character, transport network, local amenities, parks and shopping centres. Is the area buzzing or tranquil? Which would you prefer? To learn about some of the neighbourhoods featured in Moving2Madrid , click here or contact Moving2Madrid for a free consultation.

2-The property’s condition

Property investment comes in all shapes and sizes. Some investors enjoy purchasing run-down properties in the hope of renovating them and adding their own unique touch.

However, this can be expensive, time consuming and a bit of a hassle. Yet that’s not to say it’s out of reach. Again, deciding your intention here will be important.

What type of property investment project are you looking for? Would you rather bag a slightly neglected bargain and spruce it up, or would you rather purchase something that already sparkles?

3-The property’s price

Budget can be everything, and it shouldn’t be overlooked. Some property investors choose to set a target, but factor in some “wiggle-room.” All you need to do is decide what works best for you.

To clarify what you can afford, asses your finances. Will you be paying with a mortgage or up front? Do you have enough money for the deposit? If you’re looking to purchase a buy-to-let, will earned rental income be able to pay for mortgage repayments? If so, remember to factor in a potential delay between purchase and tenancy.

Once you have clarified what you can afford, set yourself some rules. Unfortunately, the “perfect house” might not so perfect if it’s way beyond your budget. It’s also worth doing some market research into an area’s average asking prices to see how your property investment compares.

 4-The area’s rental demand

When it comes to buy-to-let property, a property investment opportunity may only be as good as the area’s rental demand. If you’re hoping to achieve a steady stream of monthly rental income, void periods could cause you some concern.

However, conducting thorough research and getting in touch with some local experts should help put your mind at ease. You may find it useful to learn more about how long average tenancies last, the type of tenant the area might attract and whether the neighbourhood consists of homeowners or renters.

 5-Past trends and future insights

While past performance figures and forecasts are not reliable indicators of future performance, they can help you gauge an area’s potential.

Recognising these trends, and assessing whether your property has the space to grow in value can help you determine your potential return on investment.

Is the area or country expecting to appreciate in popularity and value? What is the city’s supply and demand status? Where does the country stand on a global stage?

Madrid is currently in the sweet spot for property investment. Prices are some of the lowest in Europe and rental yields (5.2%) are the highest of any major European city.

6-Your potential return on investment

And last, but certainly not least, consider your potential return on investment. Chances are, this will be the main driver behind any of your investments.

You may wish to ask; how well might I profit from this property investment? What returns can I expect to achieve? What percentage is this property likely to rise in value by? What rental income can I expect to achieve? To learn the answers to these questions for the Madrid market, please read our article: What return can I expect from my Madrid real estate investment?

With these starting points, finding the perfect property investment may be well within your reach! Please contact Moving2Madrid to discuss how to get started on your property investment search.

This article was written by Property Moose. As one of Europe’s first property crowdfunding platforms, Property Moose allows investors across the globe to invest in UK property online with just £10.

Disclaimer and Legals

Property Moose does not provide any advice in relation to investments and you must rely on your own due diligence before investing. Please remember that property prices can go down as well as up and that all figures, rates and yields are projections only and should not be relied on. If in doubt, please seek the advice of a financial adviser. Your capital is at risk if you invest. This post has been approved as a financial promotion by Resolution Compliance Limited.

Property Moose is a trading name of Crowd Fin Limited which is an Appointed Representative of Resolution Compliance Limited which is authorised and regulated by the Financial Conduct Authority (no: 574048).

Posted on 4 September, 2017 by Pierre-Alban Waters in How to invest, New? Start Here