Should I Invest in Property?
Are you interested in making your money work for you? Would you like to take control of your future’s financial security and earn some extra cash on the side? If so, then you should consider investing in property.
Property investment is a financially rewarding investment option, and anyone can get involved. In fact, it is one of the most common forms of investment. No matter how hands-on or hands-off you are prepared to be or how much money you can initially invest, there are property investment strategies suitable to all situations. And, with many finding their private pensions not as lucrative as they once were, many are turning to property to bump their pot.
Unlike the stock markets, property investment strategies can involve less risk but still provide a good return on investment. Whether you are prepared to get your hands dirty and jump right in with a build-to-let or commercial-to-residential property conversion or only have so much time to spare with a buy-to-let and rent-to-rent, you can get involved with the perks of property investing. And, with so many free educational resources online, you don’t need to be an expert either.
Read on for our reasons to start investing in property and the very best property investment tips from our experts here at Property Summits.
Why should you consider Property Investments?
The first thing to iterate is no financial investment comes without risk; property investment is no exception. Yes, some options are considered a low-risk investment and others where you are, in essence, gambling with your chances. However, with all investments, if you completed your due diligence carefully and weigh up your options, you can make calculated decisions and manage your investment’s risk. If you are prepared and satisfied with this, then property investment can be an extremely lucrative option.
The UK property market has been on a strong upward trend since the 1970s despite a problematic patch during the recession and credit and credit crunch. Research has revealed that house prices have grown faster in the UK in comparison to other European countries; UK house prices have risen on a berate 12.3% each year since 1988, a 333% total increase. And, during the most recent challenge from the coronavirus pandemic, the UK property market has continued this strong trend. It is no surprise that property investment has gained a reputation for long term financial security.
How can you invest in Property?
If you are convinced by the benefits of investing in property, the first thing you need to do is get your head around your personal finances and research the options that best suit your situation. It is key to note that you can always diversify your property portfolio once you’ve got started! Start small and manageable, especially if you will be juggling your property investment around your current day job. If you are more fortunate with your time and can take on a full-time project, do yourself a favour and don’t run before you can walk.
If you are feeling ambitious and have a substantial amount of time to dedicate to your project, make sure you indulge yourself in the wealth of support that is available to you. Have you considered getting yourself a property mentor who can support you with the intricacies of your investment?
So, what types of property investment strategies can you choose from?
There are many different ways you can invest in property, and all of them will provide an encouraging return on investment. You may feel you’d like to purchase a property in order to enter the buy-to-let market or jump in with commercial property to convert and develop into residential flats. When sourcing your property, you may want to consult with Paul Mahoney. Paul is the founder and Managing Director of NOVA finance and can help you source your next buy-to-let deal.
If you are starting out in the property market, you may be limited to what capital you are able to invest up-front. Buying a property of your own to rent out or renovate and sell on may not be an option; however, there is still an accessible route into property investment.
Rent-to-rent property investments are an excellent way for you to gain experience managing your own tenants and understanding a landlord’s responsibilities without you needing to purchase a property. With the other landlord’s permission, you can also enter property investment by renting an entire property and sub-letting the rooms out yourself. By ensuring your tenants’ rents covers your total rent, you can slowly bank your profits and put this towards the deposit for your own buy-to-let in the future. When this opportunity arises, you will no longer be going into this property investment without any experience, and the step up to a buy-to-let landlord will be less daunting.
Similarly, if you would prefer not to or do not have the funds to purchase a property yet, you can always make an investment through crowdfunding. Property crowdfunding sees financial funds from multiple investors pooled together and used to buy or let a property, or to lend to a developer as a loan for a larger property development. Property Summit’s Richard Bush is CEO and co-founder of CrowdLords if you are interested in this property investment method. It is a hands-off, passive strategy that allows you to see financial returns without you needing to dedicate excessive amounts of time.
If time and dedication is your concern, how about a passive loan note investment? A property loan note also referred to as a developer loan note is an alternative investment vehicle. They are best understood as an interest-bearing promissory note from the borrower (a developer or development company) and the lenders, the ‘noteholders.’ With more security than an IOU and generous interest rates, your money can be investing in a property while you dedicate your time elsewhere.
Suppose you are fortunate enough to dedicate more of your time and handwork to a property project. In that case, there is also money to be made in property development, larger commercial-to-residential conversions, and Houses of Multiple Occupation (HMOs). Some of these larger-scale investment strategies are more doable than you may think; if you surround yourself with the right power team of people and get yourself some second-to-none financial advice from a leading broker, arguably anyone can profit from property development.