Starting a property investment business can be a wise and profitable business venture if you do it right. With property investment being in the news so much lately thanks to the changes to the Stamp Duty Land Tax, many people thinking of starting a property investment business can feel quite confused.
House Network has produced this guide to help you start your property investment successfully in the best locations.
How can I start my property investment?
Investing in property is a huge financial commitment and can be very profitable when you get it right. Firstly, decide whether you want to invest in property to make money as a landlord and make money from the rental payments of a buy-to-let, or whether you want to buy a property to renovate and sell on.
Most property investors tend to let their properties in order to receive a regular income. Once you’ve chosen an area and target market, whether it’s commuters, students, young professionals or families, it’s time to buy a property.
Where are the best investment locations?
When it comes to property investment, taking a look at house prices in different areas is a good place to start. As a general rule, property in the South of the UK is always more expensive than in the North, with London being the most expensive place in the country.
If you want to let to families, for example, towns and villages with plenty of schools, small communities, parks and shops is going to be more appealing than good transport links and nice bars, so choosing your target market first is really helpful.
Buying a property to sell on in London can be a highly successful future investment but it may take years for the property to increase in value significantly, so weighing up whether or not you can afford to tie your money up in an asset for a substantial period of time is worth considering.
The London property market is hugely expensive but does prove to be the best property investment venture in the UK. If you’re considering starting your investment in London trying to look for boroughs which are less popular now and will become desirable areas over the next ten years is a good idea. Areas in East London like Shoreditch and Camden have become hugely popular over the last decade seeing house prices sky rocket.
Commuter towns also offer great property investment opportunities as they’re always popular with people not looking to pay inner city prices. Places like Shenfield in Essex, which is soon to be connected by Crossrail to London in 40 minutes, and Winchester which is just under 1 hour away, are extremely popular.
Student property investment is a fairly fail safe and lucrative property investment venture, if you’re thinking of targeting the student market. With top universities in towns and cities across the country, and thousands of students looking for housing, it’s easy to make money.
Landlords can make more money from targeting the student market as many homes are multiple occupancy lets, so you can charge per room. Houses where the front room can be converted into another bedroom are also really popular meaning you can make extra money, and once you get the hang of student lets, owning several houses in the same student area is a great investment and can turn into a successful business venture.
Areas where there are several universities in big cities have their own designated student areas like Hyde Park in Leeds, Fallowfield in Manchester and Jesmond in Newcastle which are filled with shops, bars and have good transport links. Student housing tends to be reasonably priced and always in demand year upon year so there’s always investment property for sale.
The cons to buying investment property in student areas are that sometimes a property can require more upkeep and maintenance as students are less likely to look after a property to a high standard and keep it in good condition, so you may lose money on having to repaint and replace things between tenancies.
Property Investment in the UK
With these things in mind, there are plenty of areas in the UK where you should be able to make a lucrative profit from your property investment.
Whether you want to invest in property in your local area or somewhere further out will determine how much involvement you have in your property investment and help determine your market.
Planning carefully and thinking ahead will help to ensure a successful start to your property investment venture and hopefully the highest yield in the best locations.
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