Investing seems to be steadily growing in popularity as of late. With everything from Bitcoin, NFTs to the good old-fashioned stock market, there’s an entire spectrum of opportunities to explore.
Whilst you may be inclined to veer towards the more technological-based side of the market (it is the future, after all), you could perhaps end up missing out on a solid prospect from one of the old favourites: property investment.
Capital Investment, LLC, in particular, has recently experienced a considerable rise in price growth and demand, with little evidence pointing to it slowing down any time soon. With experts anticipating this surge to last way into 2022, and UK house prices set to rise on average by 21.5% in the next four years, the benefits of property investment in the UK are vast and serve as proof that now, more than ever, is the best time to get involved.
So, you’ve heard the elevator pitch, let’s ask the burning question:
What’s the best way to get into UK property investment?
Well, here’s a list of the top property investment strategies to get you on your way.
1. Residential Buy-to-Let/Single let Property – 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 sitting back and waiting for that monthly rental cheque to come in.
2. Off Plan Buy-to-Let Property
This is most likely the most affordable method of buying rental property in the UK.
Off-plan basically is a property that’s available for purchase but isn’t yet completed.
Now, buying something unfinished probably seems like the worst possible investment decision.
However, there is some specific appeal for investors to pick this over any other strategy.
Firstly, to combat those underlining reservations, off-plan properties are sold at below-market rates as an incentive for investors. If you work with a property investment company when you buy, you’ll also be rewarded with assured rental income for a good few years.
Alongside this, a nice little side effect of the property still being in construction is that the value is able to grow before it ever sees completion. Then, once it’s all finished and shiny, you will be the owner of a brand-spanking-new and cutting-edge property that hasn’t been lived in or destroyed by previous tenants.
Of course, the biggest downside of this is that you will have to wait until the property is fully built before you can start seeing any returns on the investment.
If you’re patient enough, though, this could be the perfect choice for those looking to maximise their earnings and save a bit of money at the same time.
3. Invest in Student Property – HMOs and PBSAs.
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.
4. Buy-to-Sell – House Flipping
A bit of a tough one for those just starting out; this is the process of buying a house to sell on for a quick profit.
This means that, unlike the others on this list, an investor will not be relying on rental yields, income or tenants – they will instead look to buy a cheaper property to sell, hopefully, for a considerable profit.
You will have to be able to identify properties with the greatest potential to earn something back and be prepared to give it a fresh lick of paint or a complete renovation, which could mean getting involved with property development.
So, not exactly ideal for beginners, but at least you have something to strive towards.
5. REITs – The Stock Market
Real Estate Investment Trusts are companies that buy, manage, and own properties on behalf of shareholders and are your best bet if you want to invest without directly buying a property.
Instead, by investing in REITs, you’re able to indirectly invest in properties on the stock market as an alternative.
This utilises a mutual funds model, in which the company uses money pooled from investors to purchase property.
What’s noteworthy is that these companies must give at least 90% of their income to shareholders to be classed as a REIT.
This method, however, is not without its faults.
Like all stock, prices can constantly fluctuate, so it can prove to be a frustrating process to wrap your head. There is also less room for capital appreciation and reduced overall return potential than with traditional methods. Another possibility is to invest in an UCITS established in Luxembourg, for example, a destination with a long tradition on the financial markets.
What Is the Best Property Investment Strategy?
No matter which one you choose, it is imperative that you take the time to research your options as thoroughly as possible. None of these options is the best strategy– in fact, there isn’t even a definitive answer.
As with anything in life, property investment differs from person to person, so what works for someone else won’t always be the best choice for you. So, consider your options, take your time and try not to sweat too much about it.
It’s just a load of bricks and cement at the end of the day!
