PROPERTY INVESTMENT, WHAT IS INVOLVED?

There is so much media attention on property at the moment that I am constantly being asked 'Is property still a good investment?' It has always been my opinion that property should be viewed as an investment for the medium to long term and not the short term gain that it has been experienced in recent years. Property is something that should be made to work over a number of years to obtain the best return. I feel that a minimum of 3 to 5 years is advisable. It is also about capital appreciation rather than hoping to live off the rental income obtained.

For most investors this means purchasing a residence within a reasonable location for the purposes of renting out. This is obviously influenced by the price and can range from a house in need of complete modernisation and renovation to your modern penthouse apartment within a new development.

For anyone wishing to buy their first investment it is often a good idea to obtain advice from a Bank or Financial Adviser regarding what type of deals are available. There are many 'buy to let' packages available tailored for investors. Once you know what you can afford then it is a matter of deciding what property to buy. The main type of residence investors tend to concentrate on include:

Former Housing Executive Residence

Terraced Townhouse (both modern and aged)

Semi-detached Residence

Apartments.

The ideal situation as an investor is to purchase a property that offers minimum maintenance levels, the less hassle the better, particularly if you intend holding onto a property for a minimum of 5 years. The type, condition and location of the residence will also dictate the rental levels achievable. Rental income on most properties will generally not cover the finance repayments so you have to decide how much money you can afford to use to top up your finance repayments every month

Once the property has been purchased the next step is to ensure the property is in a proper state for letting out. This may involve furnishing the house and most investors tend to do this.

The emphasis is then on obtaining a sound Tenant at a reasonable rental level and for a decent lease term. Some investors will attempt to find a Tenant themselves. There are presently a number of Residential Letting Agents in County Fermanagh and they can also manage the property if you do not want the hassle of finding and dealing with Tenants.

It is advisable to provide a Lease document, and obtain a deposit, usually the equivalent of a month's rent as well as a month's rent in advance.

Once all is set up the ideal scenario is to have your rental income coming in every month, your Tenant happy and content to stay in the long term, the property offering minimum maintenance levels, and steady capital appreciation making it all worth while.

I feel that property offers a very strong investment particularly in the medium to long term. It is something that you have control over, you can decide how to use the property and when to sell it.