What you should ask to develop the best property investment strategy
How to invest in property depends upon several factors. How do you decide whether you should invest in buy-to-let (BTL) residential investment property, off-plan property, or student accommodation, for example? Are hotel rooms better to invest in than BTL? Should you buy unloved properties, renovate them and flip them? Would investing in a house of multiple occupation (HMO) be the best strategy for you?
To decide which strategy to use, you need to take a journey of self-discovery. These are the key questions to answer when you want to know how to invest in property:
What type of person am I?
Are you outgoing? Do you enjoy meeting people, chatting on the phone, and working for crowd? If so, you could be a self-starter. Perhaps you will enjoy spending hours researching and visiting developers’ sites, travelling the length and breadth of the country to find the best property deals.
On the other hand, if you are more introvert – or simply don’t have the time to do the donkey work of finding the best property to buy – you might prefer to partner with an experienced property expert. They can source property investment opportunities and negotiate the best deals, enabling you to step in and invest.
What is my current skillset?
Take a good look at what you do in your professional and personal life. What skills do you have that you could use in property investment?
Do you negotiate deals at work? Could you use this skill to negotiate deals in property?
Are you an organised person, and one who is used to seeking out facts and confirming them? Could you use this ability to conduct in-depth property research when searching for the best places to invest in property UK?
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Think, too, about your property investment knowledge. If you are just starting out in property and considering an investment for the first time, you may need to learn about how to invest in property before going further. Again, partnering with a property expert will be invaluable. They will help you become educated while ensuring you avoid the mistakes made by unprepared property investors.
How much time can I commit?
Most people are busy. Time is at a premium. Running a property portfolio and managing properties as well as managing a busy life and existing work commitments is hard work. I wouldn’t want to do it. Which is why I surround myself with professionals to help me. When I’ve invested in a buy-to-let property, I take advantage of professional investment property management services. I’m an investor, not a landlord.
If you are cash rich but time poor, partner with a property expert and other professionals. They’ll do all the hard work, while you could benefit from passive income and capital growth potential.
How do I feel about risk?
If you’re attracted to the idea of property investment, but you’re worried that it may be too risky, a fixed-term investment such as buying a hotel room could be a good starting point. You’ll benefit from a fixed rate of income (generally around 8%) plus with capital growth guaranteed.
For those willing to accept a higher level of risk, a more traditional buy-to-let investment property offers the opportunity to make money on other people’s money (a mortgage) with a higher potential capital gain.
Where should I invest?
Where to invest is dictated by your strategy as well as seeking out an area that benefits from strong property fundamentals (shops, schools, transport links, major employers and major investment). For example, if the strategy that suits your investment goals and investment personality is investing in an HMO, then you might do best to invest in a university city.
You should also consider how the property will be managed – if you intend to manage it yourself, then you’ll want to invest as locally as possible. However, investing locally may not produce the best profits.
What are my goals?
What do you want to gain from your investment?
Property is a lifestyle investment. Consider first what you want in life, and then how an investment could best achieve this. For example, do you want to increase your monthly income, or invest for a capital gain to build a nest egg for your retirement?
Now you understand yourself better, what next?
The range of property investment strategies is mind-boggling for beginner investors. To decide which is the best for you, it’s wise to talk to someone who understands how each strategy works. They will be able to discuss the benefits and pitfalls of each. And, using the knowledge about yourself that you’ve gained from answering the above questions, you’ll be able to pinpoint the exact property investment strategy to achieve your lifestyle objectives. To have this conversation, contact one of the Gladfish team today on +44 (0)207 923 6100.
Live with passion,