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Risks of Being a Property Investor in Yorkshire

People often say that property is a low-risk investment.

The reality is, property investment in Leeds can be a low, medium, or high-risk investment opportunity, it just depends on how you play it. The only certainty is the element of risk, the degree of risk is negotiable. We have no second thought with what kind of investor anyone is. People can do what they wish with their money, and if they’re generally respectful along the way, we hope they do well.

Some landlords in Yorkshire operate high-risk investments. These investors look at the numbers then let the rest flow. Inevitably ensuring that the formula of ‘high risk investment certainly does achieve the highest returns”

Being an investor in Yorkshire, purchasing low in high crime rate areas may appear to be high risk to the untrained eye conversely, purchasing at low value ensures a high return thus, minimises the risk in property investment.

Here’s our guide to a low risk BTL investment…

Stay loyal to aims and objectives.

Enter the game with the intentions of building a secure and comfortable future. Many landlords in Bradford and Leeds get a taste and quickly become increasingly ambitious. There’s nothing wrong with that, that’s cool. But if you want to remain low risk, always remind yourself “why” you are investing.

Waiting for the right property.

There’s a lot to be said about being patient when you’re trying to remain low risk. You get this bit wrong, and you could easily be dammed from the offset. It can be easy to become overly eager when you’ve got cash at hand. We always look for below market value (BMV) properties in historically strong rental areas and respectable areas, while ensuring the yield stacks up. To be honest, it’s extremely difficult to make the figures stack up if you’re not buying BMV (although it is possible, particularly if you invest early in an upcoming area).

The best way to achieve free equity and high yields is by being patient keeping your eye on the market and knowing what to look for. The best form of attack is to work with an expert property sourcing agent in Leeds. If you appoint an expert, they carry out a 99.9% of all due diligence, cost management, and risk assessment. In short, make them work for you.

Our expert advice; Buy the right property with the right end game in mind, it will make you much more income. Give Valor Property Investments a call for free advice on property investment in Yorkshire.

Repayment mortgages.

Most buy-to-let investors have interest-only mortgages, which usually means they’re completely relying on market growth for profit. As said, historical data shows that eventually property prices always rocket, so we get why interest-only makes sense. However, that strategy doesn’t protect an investor from any issues that may occur during the early stages of the investment e.g., a year after acquiring the BTL.

Prices will fall at some point, whether it be marginally or significantly, and either way it will cause effects that may have game-ending consequences.

Keep tenant turnover low.

This is a big aspect of remaining low risk, although it may not seem like it on the surface. The general idea is to keep your tenants happy, so they have little reason to leave.

So how is that keeping it low risk? Well, high-risk would-be increasing rent unnecessarily and running the risk of losing good tenants. Many landlords in Leeds lose good tenants because of greed, and that’s a prime example of how increasing rent can often be a false economy.

We know that good tenants and cash flow is key to successful BTL. Focus on keeping the cash flow regular, it’s often more profitable than increasing rent or making other demands.

Use estate agents to find tenants.

I know it sounds cliché coming from a property agent, but one mistake we see landlords make time and time again is being too trusting of their tenants – which can be costly. When you’re trusting someone with £80,000k worth of investment you want to know that all the correct landlord referencing, and insufficient due diligence has been completed.

For the best advice regarding property investment in Yorkshire, contact the experts.

T: 0113 222 4537

A: Angels Wing III, Glasshouse Street, Leeds, LS10 1AF