Eight important tips for property investors in 2024
In this article, we outline eight steps to enhance the likelihood of achieving capital growth when investing in property this year. Tahera Zaman, International Investment Consultant at Victorstone, notes a promising trend in the market's sentiment.
In this article, we outline eight steps to enhance the likelihood of achieving capital growth when investing in property this year. Tahera Zaman, International Investment Consultant at Victorstone, notes a promising trend in the market's sentiment.
She remarks, "We've observed three consecutive months of house price increases, suggesting that the series of interest rate hikes that impacted the market in 2023 has ceased. This development will understandably prompt individuals to reconsider property as a viable investment option."
Demographic Analysis
Start your analysis by studying the demographic composition of the area. Areas with a larger proportion of older residents tend to exhibit stability in property prices over time. This demographic often values established neighbourhoods and may contribute to a consistent demand for housing, thereby supporting price stability.
However, it's essential to note that areas with an older population may experience limited growth potential due to fewer instances of relocation or turnover in the housing market. This demographic trend suggests that while property values may remain steady, there may be less opportunity for significant appreciation in such areas compared to regions with a more dynamic demographic profile.
Schools and Property Value
Then, consider the educational institutions. The establishment of a new school or college, or the enhancement of ratings for an existing one, is a positive indicator. Numerous buyers and renters are willing to pay a premium to reside near reputable educational facilities.
Market Analysis
Next, assess the ratios – examine the number of properties listed for sale in the vicinity and compare it to the number of actual sales. A rate of over 30% sold is a positive indicator. Also, review rental properties; ideally, there should be only a few available for rent within the postcode area.
Explore Past Price Trends
Fourthly, delve into the historical price trends of the target area. Although not infallible, analysing past price movements provides valuable insights into the market's behaviour and potential future performance. Areas that have demonstrated notable increases in property values over time or have exhibited resilience during economic downturns warrant special attention.
Such trends suggest underlying strengths in the local housing market, including factors like robust demand, desirable amenities, or strategic location. Prioritising these areas for investment offers the potential for sustained growth and resilience, aligning with long-term investment objectives.
Crime Rates
Pay attention to crime rates, as lower rates indicate a safer and more desirable neighbourhood for both residents and potential buyers or renters. High crime rates can negatively impact property values and deter prospective tenants or purchasers.
Additionally, safer neighbourhoods often attract families and individuals seeking stability and peace of mind, which can contribute to long-term property appreciation and demand. Therefore, when considering investment opportunities, prioritise areas with lower crime rates for optimal return on investment and overall property performance.
Growth by nearby developments
Examine nearby developments. Significant investments by developers in the vicinity are positive indicators of growth. However, it's essential to consider potential drawbacks, such as an influx of buy-to-let properties, which could potentially drive prices down in the area.
Flood Risk Assessments
Evaluate the area's susceptibility to flooding. While this assessment can be challenging, don't overly rely on online searches for alarm. Many regions may indicate a potential for flooding at some point in the future.
Enhance your property's potential
Lastly, consider opportunities to add value. With the appropriate permissions and creative vision, there are avenues to enhance properties, increasing rental income and capital value. Options include reconfiguring layouts, such as relocating kitchens to liberate additional space, extending into roof spaces or gardens, altering planning use, or constructing garages, all of which can boost property value.
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