Despite the current political uncertainty in the UK and the housing market growing at a slower rate than in previous years, investing in property remains an attractive prospective for individuals with enough capital to do so.
There are multiple ways to do so, either buying your own house as a long-term investment, buying to let, investing to develop a property then sell it on, or investing in a property portfolio.
Before you become a property investor, you will need to decide which one of these options is the best option for you, and learn how you can make your venture a success.
Research is key to your success as there is plenty of legal red tape, especially if you are looking to become a property investor by renting.
If you are new to the property investment world, then here are some key considerations from a successful property investor.
Common Investment Strategies
As with any significant financial investment, you’ll need a solid strategy in place to become a successful investor.
What this means in the property world is deciding well in advance how you are planning on using your property if you choose to invest by purchasing a home or a flat.
The tree main investment strategies are property developments, buy-to-let developments, and off plan new-build projects.
Each of these will require a totally different approach from the others if you want to maximise your ROI.
Investing in Property Development
If you want to turn a quick profit, then your best strategy will be to invest in property development.
Not to be confused with property developments, which is a term used to describe new build projects, this means buying a property in need of work, which means they usually sell for less and can even be picked up at an auction.
You then carry out modernisation work and any other developments on the house, which will allow you to sell it on for a profit.
You will, of course, have to factor in the cost of the actual development work as spending too much at this stage could leave you with a loss, even if you do sell on the property for a significantly higher price than the one you purchased it at.
Investing in Buy-to-Let Property
Buying properties to rent them out is one of oldest way of becoming a property investor.
It makes for the ideal long-term investment, and as long as your property is occupied you will benefit both from the income generated by the rent, as well as the usual capital growth in the property value over an extended period of time.
However, any investors will have to bear in mind the recent regulatory changes affecting landlords and property lettings.
Don’t be put off by the recent price drops and sensationalised headlines, despite the effects of the Brexit situation, the UK buy-to-let market remains a highly profitable one with plenty of demand.
Before you dive in, the two key pieces of legislation that you will have to familiarise yourself with are the Minimum Energy Efficiency Standards and the Right to Rent rules.
Investing in Off Plan New-Build Projects
Anyone who is put off by the ongoing time, effort, and management required to successfully let properties should instead look at investing by purchasing a new-build home off-plan before the project has been completed.
Then, you can sell on the property for a tidy profit once all of the construction work is finished and it is ready for inhabitants to move it.
While this form of property investment is seen as a riskier alternative to buy-to-let, it does offer a big return on investment over a short space of time, rather than small, guaranteed returns posed by collecting rent each month.