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Here’s a question for you. Do you live in the best buy to let hotspot in the UK? Do you live near the best buy to let hotspot in the UK? If the answer is no (and it probably is), then you’re losing money if you invest close to home.
95% of property investors don’t buy property far away. They’re missing out as they can’t invest in the most profitable locations. The other 5% of investors wish that they had started sooner!
Investing in property from afar has never been easier. With modern technology and video calls, there’s really no reason not to do it. In this article, I explain how to invest at distance and ensure you do it right!
Long distance investing is just one of many strategies to boost returns in property. Check out this article on how to become an Airbnb host to supersize your returns. I also wrote an article on how to turn around a buy-to-let that’s losing money.
I’m a native Londoner and my initial property investments were all in London. However after 2015, investing in London became far less attractive:
- Rental yields were down to 2% in many locations
- Property prices had become ridiculously expensive
- Stamp duty tax rises made investments unattractive
The solution was to invest out of London – and I looked at Liverpool. Liverpool has seen massive regeneration, and provided a much better case for investment. I purchased properties with yields at around 8%. Investing in Liverpool is far more affordable and I’ve grown my portfolio faster. It’s one of the best decisions I ever made.
The 1st step in long distance investing is to visit the location. Spend the entire day in the new town and book appointments with estate agents. As you walk from meeting to meeting, you’ll get a feel for the place. Look around, which developments are near the shops? Which areas look rundown and sketchy?
This stage is very important. In the future, you’ll get sent details about properties. You want to know which developments and which locations are good, without having to visit every property.
When you speak to estate agents, give them your phone number and email address. Ask the agents which locations are best for investors. Good agents will know the answer – but be aware that they might just promote the properties that they have to sell.
The way to find deals from afar is the same as finding deals close to home. Find properties on Rightmove and Zoopla, or get on a phone call with an estate agent.
It’s very important to create relationships with estate agents. When you visit your location, you should speak to agents and explain that you’re looking to buy. Each time you view a property, ask the agent if they have any other good properties. Estate agents just want to sell the property and move on – if you show you’re serious, then they’ll keep you in mind.
When you invest at long distance, it means that you’re not able to view properties at short notice. You probably need to wait until the weekend and then drive up. In theory, you could miss out on deals - but this has never been a problem for me. If I get a call from an agent on Tuesday, the property’s unlikely to be sold by Saturday.
Managing building projects at distance isn’t difficult these days, what with video calling and Whatsapp. When I manage building projects far away, I make sure to visit my builder every Saturday and discuss the project. I also have the following tips:
- Speak to your builder every couple of days, and utilise video calls
- Allow your builder to buy materials on your behalf. Expect them to take a 15% surcharge for doing this
- Buy kitchens and bathrooms from local suppliers. Don’t be tempted to buy a kitchen from the branch of Magnet near your home. If there’s a problem, you want your builder to make a short journey!
The real key to the success of a building project is to have good communication with your builder. As long you have clear discussions, then you should get what you want. If you want more information on renovation projects, then read this article that describes a project of mine in Central London. I explain in detail about how I achieved a high quality result.
A good letting agent is important for any property, not just one that’s far away. However, when you invest in property far away, self-management isn’t really an option. With letting agents, I’m not a fan of the big national chains. They tend to hire young 20 somethings with little experience, and staff turnover is high.
Ideally you want a local agent that has operated in the area for a long time. You want them to have good contacts with plumbers, electricians and tradespeople – so they can deal quickly with maintenance issues. You should speak at length with different agents – ask yourself, could I work with this guy?
Long distance property investment should be in the arsenal of every property investor in the UK. London has become unaffordable and unattractive, and opportunities elsewhere are terrific.
With modern technology, it’s never been easier to invest in property from afar.