ARTICLE ORIGINALLY PUBLISHED 21ST AUGUST 2017

As I touched upon in my last article, long term out-performance is the principal aim for a residential investor in our era of lower returns.

Residential investment is a completely different mindset from choosing your own home to live in. It is discretionary by its nature and so should be your judgement. An investor should therefore be choosing a property that not only appeals to future tenants but also delivers a superior capital return over the decades to come.

Here I will focus on some of the key macro-economic factors to think through when picking your investment:

Location, location, location

An old property adage, and a very successful TV series, but unerringly correct.

Unless you are specifically looking to let and manage properties yourself, it is important to remember your money can be invested anywhere in the UK. Natutrally the sheer cost of property within the M25 is a barrier to many, but most investors regularly make the mistake of simply focusing on their local area. I would urge investors to look at the broader UK market and, using the analogy of the stock market, you need to pick the right stock in the right sector.

A major worry for most investors is how their property is managed if they are not based nearby and able to ‘keep an eye on it’. Letting/managing agents do vary in standards enormously, but you can find plenty of good companies across the country if you are prepared to do your homework. It is a very competitive market and a good agent will keep your expenditure and void periods between tenancies down to an absolute minimum. I would always ensure any agent is regulated by both the RICS or ARLA (ideally both). Do remember they don’t get their commission if your property isn’t let, so your interests are aligned.