Thinking about investing in the UK property market? It’s a very exciting endeavour with the potential for high profits and a steady income, although it’s not free from risk. When it comes to UK property investments, the low-risk investments are always in the buy-to-let market.
This allows you to invest your money into a property that can generate a long-term income while paying off the mortgage. Many use their rental income profits to save for a new property investment, allowing the opportunity to develop a highly lucrative property portfolio.
Getting started in UK property investment is quite a daunting prospect, especially when you consider the financial risks of getting it wrong. Here are some top tips to help get started in UK property investment:
Start with Buy to Let
While buying a rundown property, renovating it, and then selling for a profit may seem like a good investment, yet the potential profits gained from renting out property make it a more alluring prospect for new investors.
For instance, demand for rental property is steadily rising in the UK, meaning you could generate a strong and steady rental income for years. Unlike buying and selling, buy to let investments offer a steady source of income every month, while the demand for rental property and a rising population make it less of a risk than in previous years.
Location is Key
The location of your property will impact your potential profits from rental income. There are many strong rental markets in the UK, so you will want to research these to find a smart investment. Choose the wrong area and you may struggle to find tenants, meaning you’re paying the mortgage out of your own pocket.
Cities are an obvious choice although the cost of investment is understandably higher. That said, there are various rising markets that are currently under the radar, giving more opportunity for a shrewd investment that increases in value over the years.
For isntance, the northern parts of the UK are undergoing extensive redevelopment and regeneration. This means more work opportunities, improved transport links, and a higher demand for good housing.
Consider your current location too when scouting property markets. You may not want to work remotely as a landlord, especially given your various responsibilities, although outsourcing to letting agencies is an option.
The best buy-to-let property investments are made with specific tenants in mind. For example, buying a property with the intention of renting to students allows you to research markets where student accommodation is needed. Investing in property located near universities and colleges has the potential to provide a steady source of rental income for years.
So, before you consider what type of property you want to invest in, think about the type of tenants to target as this may result in a more stable investment.
Propertyinvestment certainly sounds cool and exciting but there is a lot day to day work that comes with renting out property. As a landlord you have countless responsibilities, some that are often unexpected, such as finding tenants, dealing with issues in the property, collecting rent etc.
This is a time-consuming process and is often very difficult for first-time investors, so consider how you’ll manage the property and whether hiring help may be beneficial. For example, letting agents can do a lot of the day to day property management for you. This will cut into your profits but may be worthwhile as it lets you focus on other things, such as growing your property portfolio.
Poor property management can result in a disastrous investment, so rather than take the risks you may prefer to outsource aspects of property management. There varying levels to these types of services too, so you can easily find something that fits within your specific requirements and budget.