Top 13 property investment tips for beginners in the UK

Top 13 property investment tips for beginners in the UK


If you are thinking about getting into real estate investing, congratulations! Done right, it can be a wonderfully rewarding and exciting initiative that can set you and your family up with a solid income stream.

Of course, you will need to do your homework on the different types of property investment and the tax implications of each, and that is where your trusted 3E’S accountant can help you out. To start you off, here are our best tips on property investment for beginners in the UK.

Buying an investment property: what to consider

Property investment for beginners in the UK requires a thorough understanding of the pros and cons as well as the kind of legal liability you are taking on. There are three main criteria you want to remember:

1. Location

“Location, location, location” is a popular refrain in the property business for a good reason. Some things to take into account when evaluating the merits of a location include:

  • Whether there is a high-demand rental market in that area.
  • Whether it is an area that is likely to become more appealing to future tenants.
  • Whether it is close enough to where you live that you will be able to visit it as necessary.
  • Whether the average property price in that location is an affordable one and whether it is likely to go up over time.

2. Property type

Investing in buy-to-let apartments or flats is a good way to test out property investment for beginners. However, you can take into account several other property types, which might even be more lucrative for you, depending on where you live. These include:

  • Single-family homes
  • Commercial real estate (office spaces, shopping centres, parking facilities, apartment complexes and so on)
  • Industrial real estate (any property where manufacturing, storage or R&D activities take place, such as a factory building)
  • Land, including agricultural land, orchards and forest land
  • Special-purpose property, such as libraries, parks, or places of worship

Remember, however, that the tax implications for these types of property investments can be quite cumbersome. So be sure to consult an accountant at every step.

3. Yield

You are getting into property investment for the money, so you want to ensure you get the most returns.

A simple way to see how much you are likely to make is by calculating the property’s potential yield, which shows the annual rental income as a percentage of the property’s total value.

Looking for a steady rental yield, rather than increases in the property’s value itself, is generally a good idea when it comes to property investment for beginners.

Properties with optimum locations (as discussed above) will likely give you better rental yields.

13 tips for property investment for beginners

Getting into property investment as a beginner can feel daunting at first, so having a clear plan and the right mindset is essential. Here, we have rounded up the best pieces of advice from the experts on getting into property investing:

1. Have clear goals

Why exactly are you interested in property investment? Before you start, set down your exact objectives and priorities, including:

  • Whether you want a steady income or are looking for long-term growth (or both)
  • Whether you prefer hands-on or hands-off properties
  • The types of property you are most interested in
  • What kind of timeframe you’re looking at

A 3E’S property investment advisor can help you refine these goals to suit your prospects.

3. Do your market research

Before getting into property investing, it is important to have a good understanding of what property prices are like and what the market trends are. Plenty of data is available online, so set aside some time to understand how prices and rents work.

4. Have a clear budget (and stick to it)

One cautionary note regarding property investment is that costs can add up faster than you think. To avoid that, set a budget in advance and have a plan for sticking to it. Things you will want to consider include:

  • Purchase costs (including taxes and fees)
  • How much you can afford to borrow
  • A contingency budget
  • Project costs
  • Sales costs

A good rule of thumb is to underestimate your income and overestimate your expenses. That way, you are less likely to fall short.

5. Get advice from the experts

Particularly, if you plan to borrow money for your property investment, it is a good idea to talk to a broker or independent financial advisor first.

They can give you tips on the best and most cost-effective financing option for your property, be it a loan, mortgage, venture capital or peer-to-peer finance. In addition, get in touch to learn about the most tax-efficient options for starting a rental property business.

We can help you determine the most tax-efficient business model, advise you on tax allowances you are eligible for, and help you minimise your Capital Gains Tax and Inheritance Tax.

6. Do your due diligence

This means doing your homework on the property you plan to invest in. You will want to verify any facts you have been given about the building and also visit the location to ensure that it is as advertised.

7. Buy below market value whenever you can

“Below market value” means lower than the price the property would sell on the open market. By opting for this, you increase your chances of making a profit whenever you choose to sell your property.

8. Add value to your property

When you add value to the property you invest in, you make your current renters happier and generate extra capital gains. Value adds can include:

  • Renovating the property
  • Adding extensions to it
  • Using it more efficiently, such as by converting a two-bedroom apartment into a three-bedroom apartment
  • Converting lower-value properties into higher-value properties (such as converting office spaces to apartments).

9. Diversify your portfolio

Property investment for beginners – and indeed for everyone – should involve some degree of diversification. It lets you hedge your bets to keep making money from some properties even if others slow down. Options for diversification include:

  • A mix of residential and commercial properties
  • A mix of high-income and high-growth properties
  • A mix of locations, established as well as up-and-coming
  • A mix of buy-to-let, buy-to-sell, developments and flips (buying a property with a plan to sell it quickly for profit).

10. Bear the risks in mind

It is always important to know what you are getting into with starting a rental property business, and it certainly is not all rosy. Some problems you could potentially run into include:

  • Legal holdups
  • Tenant problems
  • Licensing issues
  • Planning problems
  • Not getting the selling price you want
  • Not being able to sell when you want to.

12. Always think long-term

Property investment will not bring you instant yields. In fact, property prices might even fall year-on-year. But do not be discouraged! In the long run, property prices tend to appreciate so when you enter this space, have a timeframe of at least 10-20 years in mind.

13. Be prepared to evolve if you have to

The property market in the UK is evolving, just like any other market. Remember to keep a finger on the pulse, watch for price trends or external factors that could affect the value of your property, and be ready to pivot your strategy if you have to.


If you already own a property, you must pay a minimum 3% stamp duty surcharge on any subsequent property you buy as an investment. The exact rate will depend on the slab where the property’s value falls. You also need to pay capital gains tax whenever you sell the property.

You will likely have to spend some money getting your rental property ready for tenants to move in. As a prerequisite, it must be habitable, and the UK government has committed to extending the Decent Homes Standard to the private rental sector so you need to keep on top of what those requirements will be.

Think about who your tenants will be – long-term tenants, for instance, might expect more in the way of fittings and fixtures than students or short-term renters.

If your property is in an area with low demand and a lot of competition, you may need to spend a little more to make your property more attractive.

Different tenants will have different expectations from the rental property they pick. Tenants with families are likely to want large apartments or individual houses, while younger tenants might be looking to invest in more energy-efficient apartments or places close to the city centre. Accordingly, you must decide what kind of property to invest in.

Final words

We hope this guide gives you clarity on making a property investment in the UK. As always, every individual situation is different, so be sure to have a good accountant to guide you through property investment for beginners.

And if you are seeking expert help, why not contact 3E’S Accountants? We have been handling property accounting in the island country for many years and would be happy to help you navigate the unique world of real estate investing. Speak soon!

Tushar Shah


Tushar Shah
Tushar Shah, the ACCA-qualified founder of 3E’S, is an expert in financial accounting and tax advisory. Passionate about supporting small business growth, he likes to write about leveraging accounting and financial advice to solve the unique challenges entrepreneurs face, drawing on his own unique experiences.

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