What Are the Best Property Investment Strategies?
There are many different property investment strategies available to the average investor. They are dependent on your financial situation and experience as an investor to date.
Key considerations include how you view risk, how you approach and view your goals, the time you have to dedicate to your investment portfolio, your investment experience and understanding, a good credit rating and whether you are looking to invest short term or long term.
Below we take a look at what at some of the best property investment strategies.
Buy to let
Buy to let or 'vanilla buy to let' is the most popular and traditional property investment strategy.
This is where one would buy a property with the aim of letting it out to tenants, hence reaping the benefits of the rental yields and generating an income over a long term period.
This is one of the best property investment strategiesF for those who are just starting out, and most of all those that have the funds to put down a deposit or can buy outright.
Buy to Sell
Similar to buy to let, you buy a property, add value to it and then sell it on for a profit. This is one of the most profitable property investment strategies when done properly, although it is reliant on the property market. A broad knowledge of selling properties will teach you the general best time to sell. This is an essential skill which you will pick up over time as a property developer, but in the mean time - to avoid costly mistakes - always seek advice before making any irrational moves.
You may possess the skills but not the funds to leap into the world of property development. A partnership investment is where two or more parties come together on a property investment.
The risk is shared, and you normally go in with each party bringing something different to the partnership which makes it of the best property investment strategies.
Recycling Your Original Deposit
One of the best property investment strategies is where you take your original deposit and then reinvest it again so it can be used for multiple properties.
To do this, you buy the property, refurbish it, increase the value and the re mortgage it. You then take the value of the original deposit and refurbishment costs out and reinvest. This strategy is not for a first timer as it does need a lot of experience and managing costs and finance knowledge.
HMO - Houses with Multiple Occupancy
This is rapidly becoming one of the more popular property investment strategies and has the potential to generate multiple healthy rental yields which are comparably higher than a normal buy to let.
There are slightly different rules and more costs involved, such as shared facilities and utilities to factor in, but the potential income on offer makes it a very worthwhile investment to get involved with.
Social and Affordable Housing
With spiking homelessness and the UK’s new social and affordable housing regulations and homeless Reduction bill this is quickly becoming one of the best property investment strategies.
It will involve working with social services, third party agencies and those on a low income and universal credit. It is a hands on strategy with deep involvement for the landlord but it is profitable and adds social value to investments.
Whatever strategy you go for, we advise you to do your research and cater for all eventualities.
Trading Leads / Property Sourcing
There are ways to get into the investment sector without putting large amounts of money down.
A great way to build your income is to trade leads with other investors. For this you would need to know a good property deal when you see it, and be in frequent touch with the market sellers who would notify you.
You would then sell on the ‘lead’ to an interested investor. The more work on the lead, the more money you can charge for it.
Property sourcing is where you will use an agent or a dedicated professional property sourcer to source property deals to be worked on or to sell onto property developers, taking a 1-2% commission for sourcing the property, which is calculated on the price of the purchase.
This is fairly risk free which makes it one of the best ways to earn a quick buck in the property development game, however, you would a fair amount of experience and time to dedicate to this strategy.
Courses related to this article
- Property Sourcing Alchemy workshop
- Buying and selling [flipping] property secrets workshop
- Project management ace workshop
- Super size HMO's workshop
- Sign up for your free developer account
- Invest in the projects on our platform
- Our Property Training Academy
We would advise you to seek independent financial advice before investing. Capital at risk when investing in property.