There are many different types of property investment to choose from and ensuring you have the right property for your investment strategy is a tough choice to start with, especially if you have the funds but are a novice when it comes to investing.
We have listed a number of our recommended property investment types with an explanation on perhaps why they may or may not suit your investment strategy.
Traditional Buy to Let
Usually the first place to start when investing and certainly a property type which every investor needs to purchase into at least once. Traditional buy-to-lets can often be cheaper houses or flats that are appealing to the buy to let market for both landlords and tenants. Terraced or Semi-Detached, discounted from market comparables and high yielding with rental income often higher than your monthly mortgage outgoing.
These are popular because on a 10% mortgage for an outlay of £100,000 you can get a million pounds worth of property (ten properties at £100,000 each) that pays for itself due to its positive monthly rental income funded by your tenant whilst market rates encourage appreciating property prices over the following years until it becomes the right time to sell.
These properties are considered low risk, because of the lower financial output needed and lower value price and whilst that may mean the property will take longer on average to up value, the positive income produced through rent and the slow appreciation of the property over time will ensure in years to come a steady investment with positive rewards is made. Property Investors with portfolios tend to go with these because it’s a steady income source with huge financial benefits on a longer-term basis.
One of the biggest Asset Classes in the UK right now due to high demand in many towns and cities is the student property market which continues to grow and grow.
Often affordable with Pods and Units from as low as £40-50,000 these modern spaces in purpose built developments can offer fantastic rental returns which are often guaranteed by developers. This means you can outlay as little as possible but still return a healthy rent with the option of selling your unit when the time is right for you.
Not only do developers offer huge discounts to buyers of these types of properties but they often provide other incentives like payment plans, finance options, guaranteed rental returns and property management allowing for a hands-free investment that you can sit back and watch the revenue build on.
Off Plan Investing
Purchasing prior to building works start can help achieve huge discount on the initial property purchase price although this can be often considered as risky and would be subject to doing your own due-diligence on the developer.
The incentives for buying off plan are huge, you can often get discounts as much as 50% lower than the price paid on completion and you get to watch the build grow in the know that your property will be worth so much more when it’s done.
Whether you then flip on completion and make a quick buck, or bide your time and rent out to professionals at City Centre prices, if you have the cash and you are prepared to wait, then this riskier strategy can potentially boost your portfolio with unprecedented returns. Get the timing or investment wrong, it could also have a less favourable outcome.
We like to think of it as Vegas style investing due to the risk involved but a way of lessen that risk would be investing through developers we know and trust so that you feel confident in getting your monies worth.
Houses of Multiple Occupancy are popular amongst landlords that want to get the best possible rental income from their property.
Often close to Universities or Hospitals these usually larger properties once converted (and licensed) can double your rental income thus maximising your revenue from a single property let.
It has the benefits of converting the majority of rooms in your property to a bedroom so that you can earn from each of those rooms with a multiple use kitchen, bathroom and sometimes garden.
Whilst various councils will have their own licensing laws in place for these kind of properties, anyone can own one once done right and we work with a number of independent sourcers that can package ready-made options.
A unique and exclusive offering to our partners at Prime Property Agents. Showhomes offer a slice of luxury within your investment portfolio. We all know how they work, the Showhome is used as a masterpiece fitted with fixtures and fittings by developers to show potential house buyers around.
The developer sells these showhomes (fully fitted) with discount to investors, and then rents back at the market rate during the time of their stay (usually until all homes are sold within their development). Once they are done, you get a perfectly decorated home ready to live in at a snip at its usual cost.
Another growing market thanks to websites such as Booking.com and AirBnB is holiday let investments where rent is more sporadic but much higher than it is through longer term letting.
With city centre apartments ever more appealing and quiet coastal & rural retreats as popular as ever as alternatives to hotels and bed & breakfast accommodation, you can now earn the same price in a week for your home than you would usually make in a month.
For more information on the above, or if you have a particular investment category that interests you, fill out your details below and we will send you everything relevant on what you want to know, including some example deals and our latest stock.