How Should I Approach Property Investment Research?

by Rizwan Osman on 6th June 2022

Regardless of the size of your portfolio, a property is a significant investment and one which will make demands on your time. It is crucial that your buy-to-let investment delivers the yield you need together with capital growth.

property investment research

It is all too easy to be seduced by what appears to be a great buy, only to find that you have chosen a property for which there is little demand. The wrong property will eat into your time and divert resources away from more profitable features of your portfolio. Researching the available opportunities will take time but could save you a great deal of hassle and heartache further down the line.

Researching property in South London

Tooting, Southfields, and Wandsworth deliver excellent investment opportunities, but before you start viewing properties, you should establish exactly what you are trying to achieve. Is a reliable income stream your priority or is capital growth over the longer term more important? Do you need to yield returns quickly? If you can afford to wait, a property requiring renovation might ultimately yield better returns but will be of little use to you if you need an income immediately.

Are you intending to make a small number of investments or are you building a large portfolio? How would your proposed investments combine to create a portfolio which works for you and which you are able to manage efficiently? A portfolio of similar properties will be easier to market and manage. A diverse portfolio will demand differing marketing strategies and a variety of approaches to furnishing.

Whatever your aims and financial expectations, you are unlikely to achieve the best possible outcome without property investment research and you should leave no stone unturned. The big picture is important, but it could be the smaller details which make all the difference to your financial gains.

What type of investment should you target?

Your preference may be for small apartments, but is there a demand for these homes in the area you are investing in? Would a house of multiple occupancy yield greater returns, or are homes for families likely to give you the best income and fewer void periods? You should investigate the nature of the market in your chosen area. Look at the schools, transport links and facilities as these will dictate which type of tenant will be most attracted to it and therefore what type of investment you should make.

investment type

There is little point buying a beautiful family home in an area where there are thousands of students and young people looking for flat shares. You may be familiar with the area in which you propose to buy but detailed research may deliver a few surprises. If you do not live locally, research is essential.

Explore current and future potential

You should explore development and proposed development in the immediate area of any property you are considering. What appears to be a down at heal street of little appeal could be in great demand when a new shopping centre is completed, a leisure centre is built, or transport links are improved. It might be worth accepting a lower income in the short term for impressive gains in the future, if you can afford to do that.

On the other hand, a fabulous apartment in a pretty street could become difficult to rent if an extension to a railway line is built right behind it or a new one-way system triples the volume of traffic using the road.

It is always worth exploring crime rates, average incomes, and typical credit ratings in the area as these details will give you a better idea of the sort of tenants you are likely to attract.

How to research your properties

Most of the information which could prove useful is available online, although you may have to pay for certain reports. However, there is no substitute for spending time in your chosen area and walking the streets, looking at what is happening and getting a feel for the place.

The local estate agents and letting agents will be able to tell you what type of properties are in demand and it always helps to talk to the locals as a few friendly chats may provide you with some useful information not readily available elsewhere.

If you feel that you need assistance to make the right choice, we offer free advice to prospective landlords at Oscar Knight. This could give you the confidence you need to proceed with your investment and to find the perfect property to start or expand your portfolio.

Doing the maths

Once you have completed your investment property research and identified a great opportunity, it is time to get your calculator out. Is the property competitively priced? Can you afford to buy it? Can you finance any renovations and repairs? Does the rent you can achieve cover your costs and provide the income you need? If the answer to these questions is yes, you just might have found the right buy-to-let property – but you won’t know unless you have completed your research.

Get in touch to find out more about how we can help property investors.