Property Investment Options
Real estate is a wealthy industry so it’s no surprise that many people turn to property investment to build an income. Many people think that you need significant capital in order to begin investing in properties, however, there are options on the market that enable you to affordably invest, such as Buy To Let Mortgages.
If you’re thinking about taking the first steps in real estate, view some of the strategies below for more information.
Long-term Residential Rentals
One of the most common ways that people invest in real estate is by taking advantage of long-term home rentals. There will always be a demand for rental property which means that investing in rental accommodation can be a good way to start.
When you are looking for suitable rental properties, you need to think about what makes a particular location profitable. The location is sometimes considered to be more important than the condition of the property as there may be several convenient amenities nearby that attract potential tenants. For example, if the rental property is close to a university, the demand for that property would increase – particularly for students.
A lease option is a legal agreement that enables you to have control of a property while generating income from it. You also secure the right to buy the property later (but not the obligation). This agreement is a combination of two separate agreements; lease and option.
- Lease: A monthly payment is agreed with the property owner which enables you to manage the property and rent it out to tenants.
- Option: A price is agreed at which you can buy the property layer if you wish to.
A lease option can be a very attractive choice as it provides the following benefits:
- Little investment is required.
- A mortgage isn’t necessary.
- You can make money every month.
- If the property value increases beyond the agreed purchase price, you can purchase it and have equity.
House flipping is a simple strategy, you find a property that requires renovation and you buy it for a low price. You then renovate the property to make it more attractive for potential buyers and you sell the property for a higher price. Although this strategy is very common, there can be large amounts of money made. However, it can be difficult at first to navigate the waters. You can find yourself on the losing side because you lack the knowledge or expertise if you do not pick the right home.
Picking the ‘right’ home doesn’t necessarily mean picking the worst in the area. You need to consider how much it would cost to renovate, if any repairs are needed, and if the property is desirable.
Vacation rentals or holiday rentals are a popular investment choice, especially if you choose to invest in a popular destination that attracts many tourists. Rental homes tend to produce high rental yields in popular holiday destinations, particularly during the peak holiday season. However, you need to consider the competition in the destination as certain tourist hotspots are already very saturated. Discounting your property in those areas in order to compete with landlords may affect your earnings.
Before diving into any of these investment strategies, it’s a good idea to research these in more detail in order to gain a greater understanding of what is involved with these options.
Contact Hadleigh Estate Agents for Properties To Buy & Rent
If you’re looking for a property to buy or rent in Birmingham, then please get in touch with our property experts. With over 40 years of experience, we are a market leader in the Harborne and Edgbaston area. Our friendly, experienced, and qualified team of estate and letting agents like to take the time to understand your needs to find out exactly what you’re looking for in a purchase or sale.
Get in touch with us on 0121 427 1213 or you can send us an email here.