When it comes to investing in a property, there are different options to choose from. First, it’s important your investment strategy is right, especially if you have the funds but are inexperienced in the art and techniques of smart property investing.
Here a few strongly recommended investment choices when becoming a landlord.
Thanks to websites like Booking.com and Airbnb, there is an increasing demand for holiday let-ins. In this property investment type, rents may be more intermittent, but they’re still higher than what you get for longer-term renting.
Letting your home as a holiday let is going to come with challenges of its own, and this may involve some extra cost. However, your return on investment will be worth the extra cost. Be sure to do your research as you may also need certain licenses or permits to be able to let your home for this purpose.
Commercial property investment
Investing in commercial property offers investment incentives and can be widely categorized into the following categories: shopping, hospitality, corporate, and industrial. Commercial property investment often begins much like investing in residential property, and over time develops into a much larger scale which can bring higher risk but more reward.
Once you get used to the process and its challenges, you will be able to begin identifying trends or areas where you can get the best return on your investment to get the most out of your money.
The traditional buy-to-let
Buy-to-let involves buying and upgrading a residential property so as to rent it out to tenants on an ongoing or short-term basis. Taking on the job of becoming a landlord and renting to tenants comes with many responsibilities and will likely be a fairly costly thing to set up in the beginning.
You must ensure you prepare the property and have the proper landlord insurance to that will keep the property protected, as well as the funds to maintain the property and carry out any repairs as is your duty as a landlord. However, the effort is worth it as you stand you make a very good profit in most cases.
Buying via the stock market
In 2007, real estate investment trusts (or REITs) were launched in the UK to give consumers an easy way to invest in properties – and many are listed on the stock exchange. At least 75% of the earnings of a REIT will come from rented properties (as opposed to building), and they are expected to pay 90%of their rental property revenue as dividends to creditors. So, REITs are an enticing venture.
Owing to strong demand in many towns and counties, one of the major asset groups in the UK right now is the student property sector that continues to expand. These modern spaces in purpose-built buildings, often affordable with units from as low as £40-50,000, can deliver fantastic rental returns.
Every investor should choose a method that meets their personal needs and interests. Those with a stronger risk appetite may select holiday letting, while those who want to play it safer may opt for a buy-to-let arrangement. Which one appeals to you best?