Giving diligence its dues
Whatever the size and scope of your property investment activity, undertaking proper due diligence from the outset of any purchase is an absolute must.
Thankfully in today’s fast-moving digital world there’s a wealth of intelligence available at prospective buyers’ fingertips to help guide their decision-making early on in the process and prevent costly and potentially deal-breaking concerns from cropping up further down the line.
Typically, on an initial purchase, first time investors will look to the more obvious indicators such as past prices of properties sold in the locality and the potential for future growth to guide their decision-making, but there are a wealth of further considerations that still merit attention.
An obvious first step is to rule out whether there are any land use constraints on your chosen location. While unlikely to be applicable to a new build city centre apartment offered by a reputable developer for example, if your property is deemed to be in an area of natural importance, such as a conservation area or Area of Outstanding National Beauty, this could seriously curtail any further adaptions or changes you may plan to make in future.
Similarly, if the property is one of the 5 million in the UK thought to be at risk of flooding from river, sea, ground or surface water you certainly need to know in advance. While such issues aren’t insurmountable, making precautionary provisions can prove costly and certainly need factoring into the decision-making process. The Environment Agency is a good place to start your research but flood risk consultants can also play a more involved role where concerns are stronger.
The growth in building on brownfield sites has also brought into sharper focus the issue of contaminated land. Again, if buying off-plan from a reputable developer such issues will of course have been addressed in advance but for smaller, more bespoke developments it still pays to check with the local council regarding historic land use.
What’s more, future building and construction plans for the local area should always be given keen attention as any future development that affects the property’s appeal or views could have a significant impact on your bottom line. If in doubt, investors can check with their local council register.
Finally, for urban and city centre developments, having a detailed understanding of the impact of local traffic and noise is essential to the viability of your investment over the longer term, particularly when deciding who your target future tenants or buyer might be. While young professionals for example may highly value the availability of late night services and entertainment, it is likely to be far less appealing to families.
For more information on what to do when adding to your property investment portfolio, get in touch with our team.