How to choose the right property for investment?

Cheaply, at a bargain price, quickly and preferably from a "premium listing" "that nobody has seen before us". That is how we would most like to buy property. Of course, you cannot have everything. Depending on the purpose of the flat we are buying, we should be guided by somewhat different considerations. For a flat for our own use, what matters is choosing a home that fits our individual needs and expectations. For investment properties, what matters is the profitability of the future investment. So while we judge a flat for our own use in terms of the here and now and of our own needs, we choose an investment flat with the future and other people – potential buyers – in mind.

Even before you start looking for a flat to invest in, you must answer the question of who is going to be your customer in the future, and for what purpose. Do you want to rent the flat out, or renovate it and sell it at a profit after some time?

If you opt for letting, you will need to determine your target group. When you decide that you want to let the flat to students, for example, it will be easier for you to determine the conditions the property must meet. In this case these will be good transport links to key points of the city, proximity to universities and a not overly high standard of finish. For students, a convenient location and the lowest possible rent matter most. If, on the other hand, we are buying flats for commercial use, let us consider which locations are sought after by particular sectors. And which sectors currently have greater demand for office premises in your city.

If you are after a substantial one-off profit, consider buying a property to renovate and resell. In this case the target group will be completely different – you can safely assume that the potential buyer will be found among the so-called premium clients. However, take into account that renovation is a considerable expense. If you intend to do it on the cheap, you had better give up the idea. A demanding client with deep pockets will quickly spot the sham and will not be interested in such a listing.

Before buying a property you must also analyse what options you have for financing it. Do you have the cash to buy, or do you need to support the purchase with a loan? Take into account the tax on rental income and the tax on selling a flat within 5 years of acquiring it. You can probably count on the market value of the flat rising in the future and on earning a larger profit from renting it out. However, if you are unable to assess the flat's potential yourself, contact an estate agent. As a professional, they will certainly help you start a profitable investment.