It’s a well-known fact that getting involved in real estate is still one of the best investments you can make. Despite Covid-19 damaging financial situations, property values remain high, and forecasts point out that this trend will continue for the foreseeable future.
If you’re considering starting your own property business, now is an excellent time to do so. Taking advantage of the current rental price growth and potential capital growth for the future will put a lot of green in your pocket. But where to start?
Investing in property can be complicated if you let it. With so many options out there like REIT’s, HMO’s and other assorted acronyms, you may be left dazed assessing your options. Each real estate opportunity has its own list of pros and cons, but the bottom line is you can’t really go wrong.
The best bet, though, is to invest directly in real estate and avoid buying shares in properties. The stock market can be a wild beast, especially in uncertain times like 2020; there is no guarantee your money is safe. Investing directly in real estate will mean you can enjoy the rent as mentioned earlier and capital growth.
When considering starting a property business, one of the first forms of property you should consider is buy-to-let. Buy-to-let refers to the practice of buying a property with the purpose of renting it out. There are a number of reasons why buy-to-let is so ideal, but mainly it is safe. Through rent, you’re able to gain a regular income without having to work for it directly. Along with this, your property will increase in value day by day, meaning if you decide to sell it in the future, you will see a handsome profit.
It sounds like a dream scenario to continually earn money without directly working for it, but there are things to consider before you start. Firstly, research your area. You need to consider rental yields, capital growth, tenant demands, and predicted market changes. It may sound like a lot of work, but it’s worth it. For instance, there’s little point in investing in an area with depreciating house values. You may earn some short-term income, but you might make very little profit on your home when you want to sell. If you wish to start your own property business, you can look for further information and top tips from reputable property companies such as RWinvest.
Tenant demands are also vital. Covid-19 has led to a distinct change in what tenants want. With many stuck in their homes for months, people have started to notice faults in their homes and are craving new surroundings. Desires for green space, space to work from home, and fast broadband are all increasing. This is worth considering when purchasing a property, as you ideally want a property coveted by tenants.
You could also buy-to-sell. Essentially buy-to-lets riskier brother, buy-to-sell can be a bountiful venture. Also referred to as house flipping, the goal is to buy a property and sell it for a profit. Buying to sell is far more complicated than letting as it requires expert knowledge. You need to know exactly what a property is worth, the potential the property has for sale, and if the property needs any work done to it. If your venture goes wrong, and you pay extra for a property or are unable to sell, you will then have to contend with potential mortgage costs without the income to cover it. This can mean you lose cash rather than make it. If you are confident and have the expert knowledge required, it is something worth considering.
Overall, the best advice is to diversify your portfolio. If you want to become a landlord, buy multiple properties. This way, you can earn a constant and considerable income regularly. That early retirement you’ve always dreamed of can be more of a reality than you thought.