Does Experience Really Count When Investing in Property?

Investing in property for the first time can feel can feel like diving headfirst into the unknown. After all, you’re not just spending pennies, so it’s understandable that first-time investors feel like they need a little more experience before they take the plunge.

Of course, experience and an understanding of the property market are valuable, but the question remains, does experience really count when investing in property?

One obvious answer to that question is that no, experience is not a major factor. After all, everyone has to start somewhere and no one invests in their first property already knowing everything.

That does provide much comfort though. Experience may not be vital, but surely there is something new investors can do to launch their new venture on the right foot.

Luckily there are plenty of other people who can lend you their experience to help you decide property investment is right for you, and that’s what we’re going to do right now.

In this blog, you’ll find our best advice for successful investment without experience.

Tip 1: Decide What You’re Willing to Risk Early

Two red dice

We may be starting on a bit of a downer, but let’s not ignore the elephant in the room. Property investment comes with an element of risk.

Compared to other investment types, property values have consistently appreciated and underlying positive trends mean that property investment continues to be highly regarded within a professional investors portfolio. That said, there is no point pretending a risk does not exist.

This is something we look at in closer detail in our eBook but the reason I bring it up is because the first step to investing in anything is deciding how much you can comfortably spend.

A mistake that some inexperienced investors make is to immediately invest large amounts of their savings, without keeping back a rainy day fund.

Property investment can be seen to have a positive trend, as illustrated by the graph below, but like any investment, it is susceptible to peaks and troughs.

 investment-growth-chart

Deciding early how much you can afford to invest can save you a lot of headaches in the future if your investment does not immediately deliver the returns you expected.

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Tip 2: Set Your Property Goals Before Buying

Coffee cup on top of calendar and goal list

It goes without saying that you want your property investment to make you money, but beyond that, what do you want to get out of becoming an investor?

If you’re wondering what I mean, take a moment to imagine yourself as an investor. What does that life look like?

Are you a hands-on landlord or would you prefer to take a more backseat approach? If you’re investing in property alongside your day job, how much time are you going to have to dedicate to it? How many properties do you want? Would one be enough or do you want a large portfolio?

All these are important questions to ask yourself when setting your investment goals. If you don’t you may find yourself, wishing you’d made a different decision earlier in your investment career.

Tip 3: Choose a Property Type

Two street signs pointing in opposite directions

This tip could have been included in one above, but I think it’s so important that it requires its own mention.

Before you run headfirst into investing in any buy to let property, decide which one will suit you best. Apartments, houses and HMOs will all provide a slightly different investment experience.

If you’re looking for an apartment, what type and size are you looking for? Would you like a new build or something with a bit more character or both?

The type of property you invest in will not only have an impact on the cost, but also on other factors. Choosing an older building may require increased maintenance in the future, but could demand a greater rental yield.

In short, there is no right or wrong answer, but taking the time to slow down and consider your options can make your investment experience an easier one.

Tip 4: Give a Lot of Thought to Location

Close up of hands holding a map

Great property investments aren’t only found in city centres. In fact, some of the best opportunities for high rental yield can be found in smaller cities like Preston, or towns like Chorley

The trick is finding them.

Luckily, we’ve dedicated an entire article to this, which you can read here. We’ve also does some of the work for you, and highlighted the best postcodes in the north-west you should consider. Some of them will surprise you!

So, while your instinct may be to spend big on a property in the centre of a city like Manchester or London, this is often not the best strategy.

Buying in a large city centre is going to come at a much great cost. If you’re considering your first investment, spending less money in the right area is a good way to develop your experience of the market without risking everything.

Tip 5: Get in Touch With a Professional

Creative team gathered round table discussing graph

No, I don’t mean Kirsty and Phil from Location, Location, Location. Speak to a professional property developer about your investment idea and make use of their experience.

Property developers live and die on their ability to identify property hotspots and deliver high-quality results to their customers. Speaking to a developer then is a great way of gathering information about the local area.

With an expert at your side, you’ll find it much easy to understand what being an investor really means and what you should expect.

They can make recommendations based on your budget, and even help you understand how to go about renting your property out and maintaining it. Furthermore, local authorities may have different rules when it comes to buy to let properties (especially if it is an HMO) so a property developer can help you get a sense of what red tape you might face.

Tip 6: Consider a Property Management Package

House key being dropped into hand of young person

Property investment isn’t just about buying buildings. Once you have them, you need to manage them. This is where experience becomes useful.

If you’re low on experience, you should consider property management services that can take the role of landlord off your hands. At The Heaton Group, we offer this through our Premier Lettings arm.

At Premier Lettings, we manage all aspects of an investor’s property, from building maintenance to finding tenants. This takes landlord inexperience off the table as a problem that blocks you from investment success.

Using a property management service is perfectly suited to investors who only want a few properties that don’t turn into a full-time job.

Tip 7: Talk to Us

Close up of older couples' hands at business meeting

For all the reasons listed, our final tip is to talk to us. If you’re considering a becoming a property investor, we can help you identify your goals, choose a property type to suit you and help you understand what the process is going to look like.

Visit our contact page and you can request a callback from one of our property investment experts. If you’d rather learn a little more about property investment first, download our free eBook, How to Invest in Property the Easy Way: Strategies For Success and What to Avoid.

Download your free eBook - How to invest in property the hard way