April 22, 2021
So. You’ve decided to invest in property. Good decision! Property investment has consistently proved to be a sound and rewarding route to long-term financial security. But –and it’s a big ‘but’, investing in property without a well-researched strategy could be your first and biggest mistake.
Many believe that there are only two options – buying for rental income or buying to sell on for a profit (often known as ‘flipping’). In reality, property investment is much more complex.
There’s no single ideal property investment strategy. We’re all unique. We have unique goals ,lifestyles, successes and challenges. The result? You need an investment strategy that’s right for you and which best serves your needs and aspirations. Let’s take a look at the pros and cons of five property investment strategies.
A single let property is a house or apartment that you let to a single tenant. These are relatively simple to set up and manage.
First, you need to choose your location and your property. Next, find your ideal tenant. Then do your research and your maths and make sure everything adds up. Finally, keep your tenant happy, and you’ll enjoy a steady stream of rental income.
A for tenants, single let properties will usually attract families or working professionals - especially if you’re looking at a city-centre property, where workers need to be near their workplace and local amenities.
Sometimes known as ‘house sharing’ and well-suited to larger properties, HMO is when each room is rented out to an individual tenant.
They usually work best in large urban areas. These are a popular strategy as they usually attract higher rental income. On the other hand, HMOs tend to take more time to manage and are more costly to maintain.
Investing in student properties is a lot like HMO, with the single difference that, as a landlord, you’ll know exactly how long each tenancy will be – usually the length of an academic year. You also have the benefit that there’s usually a steady stream of students to take over each year.
Otherwise known as ‘flipping’, this is when you buy a property, renovate it and sell it on. Clearly, there’s no rental income, but your ROI (Return On Investment) can be rapid (often just a few months) and considerable – provided you make the right decisions regarding location, buying price and renovation costs.
This is when you purchase a property that hasn’t yet been built.
You might buy the property unfinished, research the market and, only when it’s completed, decide whether to rent or sell. This gives the benefit of flexibility, but it needs experience, a good deal of management and serious due diligence.
With off-plan property investment, you can’t guarantee a decent ROI. You’re very much at the mercy of the market. You need to research the area and the market conditions making your move.
These five property investment strategies have three things in common –
That’s where we come in. Talk to us at Donelan Property. We know property. We know investment – and we’re here to help.
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We’d love to talk to you about property investment and how we can help you grow. Call us now on 0161 641 8700, or use the contact form and we’ll call you back.