Purchasing property is a valuable investment opportunity, whether it be to turn a profit or to create your long-term home. However, with so much opportunity, there are also potential downfalls and issues that prospective buyers need to look out for. We’ve compiled our list of the top things that need to be considered before purchasing property below.
It goes without saying that budget is one of the most important things to consider. Choosing your budget is usually the first step before purchasing a property and having a figure in mind will help you narrow down what is available to you on the market.
It’s best to conduct some research of the market to see what you can get for your desired price point. At this stage it is important to figure out exactly what you’re looking for. Features such as number of rooms, number of bathrooms, garage availability, location, and local amenities are factors that can influence the price of property and your interest in purchasing.
Figure out exactly what you’re looking for from a property and then figure out a reasonable budget to narrow down your search.
Alternatively, if you are a property developer, your budget will have to consider a lot more factors. Including the scope of the work you are going to undertake, any contractors, inspections, legal fees, etc.
For developers, budget is one of the most important things you need to consider before you begin your project. Lack of funding or poorly managed budgets can lead to projects falling behind or stopping completely. There are several funding options available that can help with budgeting should you need an alternative.
A traditional bridging loan is a short-term loan that can give you quick access to funding (within 5 days). Bridging loans work by offering you funding to get your project property into a mortgageable state. Your bridging loan will give you funding for the short term until you can secure a mortgage. From there, you can use your mortgage to pay off your bridging loan. Simple, quick, and easy.
Location is important for any property purchase. Whether you’re looking for the prime location to start your family, or the ideal neighbourhood to undergo property development, location plays a big part in price point and the interest of other buyers.
When considering the location of a property, you need to consider things such as:
A lot of cities in the UK will have boroughs and neighbourhoods considered up-and-coming areas. These areas tend to be more desirable as property prices will be expected to rise as the area develops.
Properties in up-and-coming areas are usually a great investment opportunity as you are likely to profit off of the increase in house prices when you come to sell your property.
Working from home has become a new normality for some employees. However, if this is likely to change for you, or you still have to commute to work each day, travel links are important to consider.
Whether you drive yourself and need quick access to motorways, or perhaps take the train, having access to train stations, bus stops and other travel links is important. Especially if you see yourself living in the property for a while.
Having good travel links can also increase the value of your home. The Guardian reports that buyers in London will pay an average of 10.5% more for a home that is within 500 metres of a tube station. While this may not fetch as much outside of London, having good travel links is something future buyers and you will find useful.
Smaller details, such as the quality of the electrics, plumbing, water, etc. can be easily hidden when viewing a property. If you are serious about putting an offer in on a property, it is advised to get a property surveyor to make sure the home is worth what you are inclined to pay and that all the functional elements of the property are in working order. Wi-fi connection, phone signal and other elements like that might seem unimportant to begin with, but if you plan to live in the property, these things will very quickly become pain points.
This is a crucial step. If you put an offer in on a property and it is accepted, but you then realise there are lots of faults with gas lines, electricity, damp, etc. there is little you can do. Always take the necessary steps, prior to purchase, to ensure the property is right for you.
Some property purchases are done solely on the potential of a property. Perhaps your new purchase is in need of a full renovation that will greatly increase its value. Or perhaps you’ve noticed a fixer-upper that is well within your budget. Sometimes the potential of a property is in the eye of the individual, and with the right eyes, can result in your dream home, or a large profit, as a result of a successful development.
In 2021, 20% of those asked said they had purchased a fixer-upper, compared to 42% who said they purchased a turnkey property.
For properties in desperate need of refurbishment to realise their potential, securing a mortgage may be difficult. Luckily, there are alternate options, such as refurbishment loans. Refurbishment loans are short-term loans for investors, landlords and developers, providing funds for projects that need to be updated, refurbished or fixed up before they can be sold.
Refurbishment loans are secured against the property and can be paid back once you have mortgaged or sold the property.
Some properties, such as auction properties offer loads of potential to the right buyer. Auction properties can sometimes be an issue to mortgage, and because auction purchases happen very quickly, it is important to secure funding prior to the hammer falling.
Auction finance can be pre-approved in as little as 3 minutes and offers you funding to purchase your next property at auction. After that, you have 12 months to pay back the borrowed amount.
Just make sure, if you do buy a property that needs work, that you’ve considered the total costs and all small details before putting in an offer.
If you are buying a property that you intend to make a home, it is important to look to the future and the life you have planned, not necessarily the life you have now. For example, if you are planning to have children, it’s worth considering homes with more bedrooms and outdoor space so that you don’t outgrow the property too quickly.
Thinking forward to all the things you may need in the future to turn a property into a home - utility room, spare bedroom, outdoor space - can be the difference between a short-term property and a forever home.
It should go without saying, you need to thoroughly read your contract before signing anything. Property contracts can be tricky to understand, and you should enlist any relevant legal help to make sure your contract is correct. Never sign without understanding what you’re signing.
Depending on the type of property you are looking to purchase, there are lots of funding options available. Typical mortgages, bridging finance, refurbishment loans, and auction finance offer different funding alternatives for more specific projects. A mortgage doesn’t work for everyone, and not every project can be mortgaged. To find out more, you can read the individual pages highlighted above.
Whether you’re taking a traditional mortgage route, purchasing at auction, or looking to refurbish a host of development properties, there are funding options that can support you along the way, giving you the opportunity to access funds quickly when needed, and better manage your property purchase.
At Glide, we offer lots of funding options to see you in your new home, project managing your next big development, or securing auction properties with huge potential.
We offer loans from £50,000 - £5,000,000. You can apply online in less than 5 minutes, and you’ll be in contact with a decision maker from the get-go.
No matter your ideal property purchase, Glide have borrowing options to suit everyone. If you’d like to know more about our services, or how we can help make your property dreams a reality, get in touch.
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