Common mistakes when investing in Manchester properties and how to avoid them

If you’re an aspiring property investor, you’ll want to research what’s expected of you and what you absolutely need to do to be successful. In this blog, we’re letting you know common mistakes when investing in Manchester properties and how to avoid them.

Investing in the UK property market

Generally speaking, the UK is a great place to buy an investment property. However, there are some common pitfalls that you should be aware of. The good news is that with a Manchester property investment team on hand, you can leave the hard work to us and get back to the things you enjoy the most. We’ll let you know more about our services later in the blog.

In previous years, London has been a hotspot for investors; however, it is becoming more crowded and fewer people are choosing to live in the central area. According to research, Manchester has overtaken London regarding property investment.

In 2021, 549,853 people lived in Manchester, meaning that there are plenty of opportunities available for investors.

Why invest in Manchester?

Manchester is commonly known as the Northern Powerhouse, and it is a popular location for people of all ages. There have been many developments in the city which have helped to strengthen the economy. Here’s why you should choose Manchester for property investment.

• High rental demand - rental growth is currently at 12.2% 
• Great economy
• Developments 
• Growing population 
• Business variety

Read our blog on why now is the time to invest in Manchester property.

Common mistakes when investing in Manchester properties

Overpaying and underestimating costs

Unfortunately, many new investors fall into the trap of spending more than they should on the start-up processes. This can be a result of market fluctuations and increased demand for rental properties.

You can avoid over-paying by looking closely at the property value, the local property market and the potential return on investment. You should also do some research into rental yields. If these are too low, then the investment may not be worth it.

The exact return you should aspire to depends on your personal circumstances. Those who are new to the world of investment should start off expecting a lower return on investment.

TIP: If a property is advertised with a rent guarantee, make sure that it is genuine.

Not considering the legal implications

Property investors need to consider various legal implications, such as health and safety rules. Additionally, there are various taxes you are required to pay, including stamp duty, income tax and capital gains tax if you are selling a home.

It’s important to remember that you will likely need to pay for surveys on the property before you can start earning money from it.

Not considering the time frames

The whole process of purchasing a property for investment might take longer than you think. There can be many reasons for this including construction work, planning permission or even administrative delays.

To protect yourself from these delays, you should always add another six months onto any time frame. This allows you to manage your finances better and means you’re better prepared if things don’t quite go to plan. Ideally, you would not be relying on your rental income.

Another common mistake is working with low-quality builders. Make sure that you have thoroughly checked out the builder you plan to use for the investment property. Ask to see previous work and always check for reviews online.

Choosing a poor management company

When searching for property management companies, you should always check for reviews and that they can offer the services you require. Choosing the wrong company can land you in hot water and can be a real headache for new investors.

To avoid this, it’s a good idea to meet with the prospective companies. This allows you to ask any questions about their track record, services, and how they deal with issues. It can be a good idea to look for trusted recommendations when it comes to property managers.

Quality management companies should have a website and a good online presence too!

Investing in property in the wrong location

Unfortunately, many investors rush into purchasing properties, often leading to investors choosing the wrong location.

The best thing to do is take your time to get to know the location and forecasts for population growth. Find out about new and future developments, rental demand, potential yields and local property trends.

Look into which property types are performing the best in the area and why. This can help to guide your decision and give you peace of mind that you’re making the right choice.

Of course, the experts at Parello are also available to help you make the best decisions about your property investments.

How we can help with the Manchester property market

At Parello, we are committed to ensuring a smooth process regarding Manchester property investment and property management.

In the beginning, we can help you to enhance your property portfolio with quality homes that will increase your earning potential. Once we’ve found the perfect properties for you, we can support you with all aspects of Manchester property management, from finding the right tenants to rent collection and regular inspections.

We know how busy life can be as a landlord, so we’re here to take the pressure off with our knowledge and expertise. We have nearly 30 years of experience working with ambitious landlords just like you.

We hope this blog has been helpful in identifying common mistakes for investors in Manchester. We always encourage you to do your due diligence before any real estate investment.

Are you ready to start your journey as an investor, or do you need management support? Contact us today to learn how we can help!

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