A question I am sometimes asked is ‘how do I know what type of property to buy?’ which is a great question. The starting point for me would be maybe a bit of a convoluted process, but I think it’s really important to get the foundations right.
Firstly, sit back and consider why do I want to be a property investor, because there is going to be particular goals and aspirations and results which I want to get out of property.
The next stage would be to select the right strategy. In selecting the right strategy you’re then going to start getting a clue as to the type of property that you need to be buying. For example, if my goals required it, it may be that I’m looking for a buy to let property. If I was going to buy a buy to let property, because of the particular strategy which I use in buy to let, I would be looking for a cheaper property in a cheaper area which needs some work doing to it before I can do a refurb and add some value. If you’ve watched any of my videos, you’ll know why I do it that way.
But it may be, for example, that your strategy means, because based on your goals that you need to make a lump sum of cash quite quickly. In which case I might be looking for a property to flip. If I was buying a property to flip I wouldn’t be looking for a cheaper property in a cheaper area.
Why? Because a cheaper property in a cheaper area isn’t a flip property. It’s going to take longer to sell and there’s going to be less of a demand for it because what I ideally want to do with a flip is to sell a property to an owner/ occupier. An owner/ occupier wants to buy the property now.
I wouldn’t be going for the most expensive property because there’s a smaller demand, there is more limited market for the most expensive property in any area.
But there’s a sweet spot. It’ll be a property which will be good for maybe a first-time buyer or a second time buyer, so it won’t be the most expensive, but it’ll be more expensive than a typical rental unit.
So again, by knowing what I’m trying to achieve and by knowing the right strategy that will help me to decide the type of property I need to be buying.
Here’s to successful property investing.
Peter Jones B.Sc FRICS
Chartered Surveyor, author and property investor
PS. By the way, I’ve rewritten and updated my best-selling e-book, The Successful Property Investor’s Strategy Workshop, which is an account of how I put together my multi-property portfolio, starting from scratch and with no money of my own, and how you can do the same.
For more details please go to: