Finance, Investing

4 Effective Property Investment Strategies

Business Advice | 10 March 2023 | 12 months ago

If you are thinking about investing in property, you have come to the right place. We have taken a look at four property investment strategies, and we help you to weigh up which one is right for you.

Why Invest in Property

There are two main reasons to invest in property. Firstly, property investment offers good returns in the form of rental income, which is income that you can count on month after month. Also, you could benefit from capital growth returns. If the property becomes more valuable over time, you could sell it and make a hefty profit. There are four main ways of investing in property, all of which we have taken a look at below.

Single Buy to Let

A ‘buy to let’ investment means purchasing a property with the specific aim of renting it out to a single household. This could be a single person, a couple or a family. The main benefit of ‘buy to let’ property investment is that you will have a regular income from your property, in the form of rent from tenants. However, not all of the income is profit, as there are various costs associated with being a landlord.

HMOs

HMOs, also known as houses of multiple occupation, are aimed at multiple tenants. Instead of being lived in by a couple or family, HMOs are rented out to individuals who form multiple households. Investing in HMOs involves buying a property to rent out, and then renting it to multiple tenants. This is usually single professionals or students. It’s often possible to make more money by renting out rooms on an individual basis, but tenants don’t tend to stay for as long and there are multiple people to manage.

Buy to Sell

A ‘buy to sell’ investment is for those who want to invest money into one property, with the aim of selling it on as soon as possible. It involves buying a cheap property, renovating and improving it, and selling it on for a profit. The main benefit of ‘buy to sell’ is that it’s one of the simpler ways of investing in properties; the amount of work you put in can really dictate how much profit you make. However, with the property market fluctuating, there is no guarantee of how much money you could make.

Student Accommodation

Buying purpose built student accommodation is a form of property investment that’s growing in popularity. This involves buying student accommodation, and renting it out to those who are studying. A lot of money can be made by renting to students, as there are always students looking for somewhere to stay during their time at university. However, students are rarely there long term, and you’re likely to experience a high turnover of tenants.

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