This week, we share key learnings from the last of our London 2016 Forum breakout sessions.
Even if you're not buying or investing central London property, there's still useful info below on "What You Might Not Know About Investing in Property".
Post Brexit, central London property prices have dropped 5-8% and most expect them to stay fairly flat for the next five years.
That said, if you are looking to buy or invest in a property...
Everything's negotiable, BUT get it in writing: From parking spots to types of upgrades for materials and finishings to even changes in the layout, you can (and should) negotiate everything. This is where it helps to have the experience of a property sourcing expert like Jo Eccles on your side to help know what to ask for and what to watch out for. (Jo's even seen developers use shorter beds to make a space look bigger!) Oh, and make sure to get an experienced solicitor on your side before signing over any money and CHECK their work.
It really is about LOCATION LOCATION LOCATION: With rental yields (rental income minus mortgage and management costs) in central London rarely topping 2-3pc these days, location trumps nearly all else when it comes to property values in competitive city areas. Further out in surburban areas there are more variables that matter, but in cities, it's usually about the comparable "price per square foot/meter" number for the local area.
Think through all the scenarios before buying with family / friends: Pooling funds together to jointly buy a property together with relatives or close friends may be a good idea...but in practice, who will manage the day-to-day maintenance and admin logistics? How will costs be split? Who decides on the tenants and what happens when one of the buyers needs to cash out, but the others don't want to sell? These are only some the issues to consider and discuss before investing in property with others, and a good solicitor has often seen them all before. So ask for advice and potentially draft a joint buyers agreement that spells out the logistics in advance.
Watch out for costs: Buying a property usually means you're locking up a significant part of your funds in one illiquid asset. Before committing your funds, think carefully about ALL the fee costs and capital outlays for renovations and emergency repairs, not to mention how you may be financially affected if mortgage rates increase. Expect to pay 1.5-2pc for a buyer's agent success fee as a one-off cost (if you're seeking help in finding the right property), plus approximately 10-15pc in letting and management fees in the first year if you plan to rent out the property for income. Always read the fine print: watch out for extra fees charged by agents (inventory charge, vacancy/renewal fee, etc).
What's been your experience when it comes to buying / investing in property? What advice do you have for other women? Please share your thoughts with us on Facebook here.