Investment is increasingly becoming something that everybody seems to want a piece of.
But where do you start?
And, more importantly, where do you look?
Most would quickly turn their eyes to the obvious choices – stocks, cryptocurrency, or perhaps even bonds.
One that may slip under your radar, though, is investing in property.
An old favourite, when you know what you’re doing, property investment can be a very lucrative venture indeed. As any old hand will tell you, an investor must develop a solid tactic before jumping in.
Before you even get started, you need to do as much research into the field as possible and ensure that you have accurately planned for your opportunity.
Covering everything from the benefits of buying off-plan property in the UK to buy-to-let and HMOs, if you’re thinking about investing in property but you’re unsure where to begin, this handy guide may just be perfect for you.
So, without further ado (hold your applause until the end, please!), here are just a few of the best strategies for UK property investment.
Investing in Off-Plan Property
One of the most affordable methods of buying rental property in the UK, off-plan property is probably also one of the most popular methods of investment at the moment.
Off-plan property is essentially one that’s available for purchase but is yet to be completed.
For all those of you out there scratching their heads and/or chins, yes, this could be seen as quite an odd way to spend your money.
However, whilst it may appear to be a bit daft, there is actually some appeal to this.
First, properties sold as off-plan are done so at below-market rates. This is, of course, an excellent incentive for investors, especially so for those with some reservations.
Additionally, with the property still being under construction, its value is able to continuously grow before it ever sees completion, and, once it does, you will then be the proud new owner of a brand-spanking-new building that’s sure to attract a whole bundle of new inhabitants – particularly those wish to not live with the burden (and soiled sofas) of the previous tenant.
As with anything in life, though, this strategy is not without its downsides.
Before you can start seeing any returns on your investment, you’ll have to wait until the property is fully completed and built.
If you are patient enough and can hold out for this, off-plan could be the perfect option for those seeking the opportunity to maximise earnings and save a bit of money at the same time.
HMOs and PBSAs – investing in Student Property
Instead of letting out the property as the entire house/flat to a single tenant or family, you can also let out individual rooms to further increase income and yield.
This is known as houses in multiple occupancies – HMOs, for short.
HMO tenants will often share some amenities, like a kitchen or bathroom, but each individually pays rent.
This is perfect for those looking to invest in a student property but can be especially tricky for those just starting out.
With more tenants comes an increased risk of wear and tear – something even more likely if they are students – and more time spent by you actively managing the property.
HMOs are also subject to strict regulations, with many cities’ trying to limit the rise of HMO conversions entirely.
Alternatively, purpose-built student accommodations are specifically designed to house students and do not fall under these rules.
As HMOs start to fall in popularity, and with students wanting higher-quality modern living spaces, PBSAs are beginning to look more and more appealing.
As they are built specifically to cater for their needs, PBSAs are becoming a top choice for students.
With less time needed to manage the property, as the majority come equipped with its own management team, it’s also gaining popularity with investors, allowing for a completely hands-off investment.
Buy-to-Let – The ‘Safe’ Choice
Like property is to the broader investment world, this strategy is one of the old favourites and is likely the first to come to mind when thinking of investing in property.
The main reason for this is that it’s easy to understand and get started with.
Essentially, all you have to do is buy a property and find someone to live there.
Research is vital for this one.
You need to decide the best area for investment, as well as find an attractive property (preferably with modern amenities, although if you’ve got a lovely little fancy castle somewhere, you could probably do something decent with it), and then find the right tenant and move them in.
Then, it’s just a case of (theoretically) sitting back and watching for that monthly rental cheque to come on in.
Which one strategy is the best?
Unfortunately, there’s no one answer.
None of these options is the best strategy.
In fact, the only answer that can be provided is that there’s no definitive answer.
Like anything, property investment differs from person to person. What works for someone else won’t always necessarily be the right decision for you.
Consider your options, take your time and try not to panic too much.
Possible header image – Photo by Maria Ziegler on Unsplash– ()