Friday, December 15, 2017

8 Ways To Invest In Property

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Thinking of investing in property? Real estate is still a great place to put your money and see a return. There are multiple ways to make profit out of property, all with different risks and costs. Here are the various ways that you could get into property investment.

Become a landlord

The most common form of property investment is to become a landlord. This involves renting a property out to tenants – the rent covers the mortgage and should be enough to then make a profit on top. A buy-to-let property can be a stable investment – providing you choose the right property and attract the right tenants. Your property needs to be in good condition in order to limit the amount of maintenance required. Your tenants meanwhile should be carefully screened in order to ensure that they pay their rent on time. It’s possible to take away some of the stress by hiring a property manager, although this will cost you extra.

Own a holiday rental

Another form of investment could be to buy a property and rent it out to holidaymakers. This requires a little bit more work than a regular buy-to-let property as you need to constantly be marketing your property to attract new guests. The property needs to be in a location that attracts visitors all year round whether these are people on vacation or people travelling for business. Holiday rentals can be more profitable than buy-to-let properties when planned out carefully. It’s possible to manage a property abroad by hiring someone to greet guests, clean the property and attend to repairs. You also have the freedom to use the holiday home for your own personal use whenever you like.

Rent a property out for events

It’s possible to rent a property out for events such as weddings, parties, business functions and charity fairs. This is common with converted barns. Turning such a space into an investment requires constant marketing and maintenance. The potential for profit is huge if you can keep it booked up regularly.

Flip a property by renovating it

Flipping is a more risky strategy best reserved for more experienced property investors. It involves buying a property and then selling it afterwards for a higher price. The easiest way to up the value of a property is to renovate it. This does require putting a bit more money into the property in order to improve it – skilled flippers know how to save money on renovations that will earn the biggest rise in value. For example, a new bathroom or kitchen can hugely up the value of a property. Adding extra bedrooms by building extensions or converting a pre-existing space (such as a garage or loft) can also increase the value of a property. Those that are good at DIY may be able to handle some of the renovations themselves, whilst others may prefer to pay extra and hire skilled handymen. Repossessed properties marketed ‘as is’ are popular amongst flippers – they’re cheap to buy due to being in bad condition, but with a few tweaks can be transformed into an amazing property.

Flip a property through natural appreciation

The other method of flipping a property is even more of a gamble and relies on buying a property in an upcoming area that’s naturally rising in value. Apartments for sale in city centres can sometimes be great for this kind of investment. Some properties could take months or years to significantly rise in value – moving into these properties might be worthwhile. Properties can depreciate in value if your happen to buy in the wrong area, so a lot of research into the area is required.

Build your own home, then sell it

A self-build is usually something people do when designing their own dream home. However, it’s possible to build a property in order to then sell it for a profit. This is a lengthy process – the average house takes nine months to build. Building a house can work out cheaper than buying. The cost of hiring designers and labourers and the cost of buying necessary materials can come to less than 100k if you’re smart about it. You don’t have to pay all this upfront and can take out a self-build mortgage. The costly part is buying the necessary land to build your property on. Some people have managed to build houses for 250k (including the cost of land) and then sell them for 350k making a 100k profit. It takes a lot more patience than other investments and can be more of a gamble, but could be one of the more profitable methods.

Crowdfund a property

Many forms of property investment require you to already have a large sum of money to lay down a deposit. However, there are methods out there for those that don’t have a lot of money to invest with. One such strategy is to get involved in property crowdfunding. This involves teaming up with lots of other investors to buy a property, splitting the purchase cost. From here, the property can be rented out or flipped. The profits are shared out between all the investors. You won’t make a huge return with this type of investment, but it’s more suitable for those on a tighter budget.

Invest in property shares

Property rental companies are huge corporations that have the money to buy up lots of properties and rent them out to tenants. With property prices continuously rising, it’s thought that property rental companies will play a big part in buying buy-to-let property in the future. Some of these companies are willing to let investors buy shares. This allows you to get a slice in the profits of this company. This form of investment is probably the least hands-on along with crowdfunding – you are investing money into the company and not the properties themselves. It’s worth ensuring that the company is stable and able to maintain a profit in the future.

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