To invest in the property market and make a profitable return on your investment, an investor needs to be sensible and strategic. As per estate agents in Oakwood, you do not need significant capital or major assets to invest in the property market; all you need is a good investment strategy. And essentially, investing in the property market is like running a business – you need to use your money wisely, you have to keep putting in profits to make your business grow and you need to make sure that your money is being used efficiently and effectively to secure a good return on investment.
Real estate investment is actually considered to be one of the safest and most stable forms of investment, with a hefty return, yet some people are sceptical. At the end of the day, you need to invest strategically and wisely. Understand the market trends, try to gain in-depth knowledge of the property market, understand the market demand and supply, do your due research before making an investment and always get in touch with the experts, be it financial experts, real estate agents, solicitors or surveyors. Here are 5 ways for potential investors to invest in the property market, wisely.
1. Invest in rental properties
There is always going to be a need for rental properties, no matter the city or country. People are always going to need a place to stay, and with the average price of property increasing at a significant rate in the UK, a lot more people are going to choose to live in rental properties as opposed to buying a property. One of the best ways to invest in the property market is by investing in rental properties. And, there is only one important thing to keep in mind – location. To have a profitable rental property, you need to invest in the right location. In the past few years, areas such as Manchester, Leeds and Birmingham have seen a tremendous increase in the average price of property as well as an increase in the average rental yield, which is great news for landlords!
2. Choose the right property based on the market demand
When you are planning on buying a property, be it a commercial property or a rental property, you need to choose the right type of property based on the location. For instance, if you are thinking about investing in Oxford or Leeds, then you should think about investing in an apartment as these university cities have a strong student population. On the other hand, if you’re thinking about investing in the suburbs, then a three-bedroom house might be a better investment as families would prefer a spacious house over a crowded apartment. Similarly, if you are thinking about investing in a commercial property to earn a monthly rental, then invest in the city centre as the demand there will be pretty high. While the location is one of the most important criteria when it comes to investing in property, choosing the right property in the right location is equally important.
3. Consider flipping houses
Flipping houses is actually a very popular concept nowadays, with buyers earning a hefty profit on every house they manage to flip and sell. When it comes to flipping properties, there are a few things you need to keep in mind. For one, you want to invest in a property that is structurally sturdy so that you do not have to spend too much time or money on repairs. Secondly, it is important to make sure that the property has no major issues, such as plumbing problems, leaky roofs, water damage and so on. And lastly, make sure you know how much money you need to spend on flipping the place before you invest – after all, the more money spent on repairs and damages, the less profit you will earn. In short, try to find the worst looking houses in the best neighbourhoods; when you flip and sell such properties, you will certainly earn a hefty profit.
4. Think about investing in commercial properties
According to most property experts, commercial properties are some of the most lucrative and profitable investments. After all, every business, every company and every entrepreneur needs a space to work. From retail boutiques to estate agencies, from marketing agencies to lawyers, every professional needs a physical space to run their business. Not only are commercial properties a good investment, but you can actually make a whole lot of money thanks to commercial property investments. Usually, commercial properties have a long-term lease which further reduces the struggle of finding new tenants. Also, the value of commercial properties tends to appreciate quickly, so if you decide to sell the property in the long run or the short run, you will probably earn a decent profit when you make the sale. Just be sure to invest in the right locations and diversity your portfolio so that you can make the most of your investments.
5. Have short-term and long-term buys
Some investors solely believe in long-term buys, which simply means that these investors will buy a property and hold on to it for at least 5 to 10 years, or more, before they think about selling. Then, there are some investors who choose to invest in short-term buys, which means they sell the property within a few years to earn a quick profit. However, a strategic investor will tell you that the best way to invest in properties is by investing in both short-term and long-term buys. If you do have the capital, then the rule of thumb to follow is 3-2-1. Essentially, you invest in three properties, you sell two properties in the short term, and you hold on to one property for the long term. At the end of the day, an investor needs to use his or her knowledge of the market and understand the market conditions in order to decide when to sell a property and when to hold on to a property.