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In difficult times it is often good business practice to go back to first principles and see if a sound strategy is being used.
The Buy to Let property market is certainly going through a tough period, although there are some benefits, lower buying prices being one.
How can investors take advantage of reducing prices and increasing rental values, to lay down a property investment for the medium and long term?
Follow good business practice:
1) Start with the customer, not with the property.
2) Identify your target tenants.
3) Research their needs.
4) List their wants.
5) Find post codes where these needs and wants can be delivered.
6) Check rents in these areas with local letting agents.
7) Survey the prices of suitable properties in these areas.
8) Analyse the potential growth in value of these properties within the identified post codes.
9) Work out the cash-flows for three to five years.
10) Calculate the Return on Invested Capital.
[ Be comfortable with a number of false starts. If it was easy, everybody would be buying there and prices would be much higher. Also, by designing your business model to match customer/tenant requirements you will be minimising empty periods and maximising sales revenue.]
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