Top tips for successful property investment in 2016
Buying property is still one of the biggest financial commitments people make in their lives. For many, their first property purchase is a home, but what about after that? Property investment has become an extremely popular method of income generation in the UK, with the most successful investors making incredible financial returns.
Despite George Osborne’s recent legislative changes intended to clamp down on the buy-to-let market, there are still plenty of ways to make the most out of property investment. Here are our top tips for successful investment in 2016.
1. Do your research.
In any long-term investment it is important to have all of the information before signing the contract. When purchasing a car, we’ll investigate not only the vehicle’s performance, but also service history, previous ownership and whether the running costs will fulfil our needs. Investing in property should be taken as seriously.
A successful property investment requires extensive research into prices, rental yields, capital growth and area demographics. With the internet offering so much of this information, investors no longer need to be afraid to invest in a location away from their own home. Many of the most lucrative areas for investment centre on major cities such as Liverpool, Manchester, Bradford and Birmingham. With the Northern Powerhouse strategy driving massive industrial investment to the north of the country, there’s substantial opportunity for capital growth and excellent rental returns in comparison to other parts of the country.
2. Get creative.
Humans are creatures of habit and comfort. Many property investors understand the traditional buy-to-let market, however may be missing out on other property opportunities that offer alternative options. As the upcoming stamp duty increase aims to make it more difficult to enter the buy-to-let market many successful investors are moving their money into more offbeat sectors, and making substantial returns in the process.
Growing faster than any other UK asset class since 2011, student accommodation offers high returns, significantly reduced purchase prices and substantial demand for these properties is driving investment in this market. With the UK’s worldwide reputation for academic excellence, the number of students is continually increasing, leading to a highly stable demand source for the sector. Click here to find out more about investing in student accommodation.
Care home suites and hotel rooms; in addition to providing high rental returns, low entry costs and no ongoing maintenance fees, are also exempt from George Osborne’s stamp duty increase. These properties can provide yearly returns of up to 10% and are usually fully-managed by specialist operators, meaning zero ongoing management and maintenance costs.
3. Buy with your head & think strategically.
One mistake that lots of inexperienced investors make is buying property with their heart, rather than their head. You may have always wanted a cottage in the country - but as an investment property; is it going to make money? Successful property investments are built on clear financial goals and property with the credentials to meet those goals.
It’s important to remember the primary goal of investing in property is to generate an income. Whether the property is attractive or not is less important. It’s vital however that it offers a secure income stream.
It is advisable to conduct annual reviews of property portfolios to ensure each individual investment is contributing to the overarching long-term goals.
4. Seek guidance.
Investment in property is a great way to make money, but can also pose the risk of losing money if not done properly. The purchase process can also prove to be lengthy, complex and stressful.
Select Portfolio have a knowledgeable team on hand to guide you through your property investment purchase based on your specific requirements – completely free of charge.
Working closely alongside both first-time and seasoned property investors, the team build a full client profile and proceed only with investments that are 100% right for the client.
For more information on how we can help you find your ideal property investment contact our team today on +44 (0) 1202 765011 or email [email protected].