Property investment is one of the most common types of investments. Many people feel property should be one of the first investments to consider when looking at the different ways to invest your money.
The UK property market has been seen as a stable market to invest in. However, there are risks that come with investing in property. The property market is continuously changing. Property prices can increase or decrease and with buy-to-lets, demand for rentals can change as well.
Investors are more likely to see success when investing in property for the long-term. This provides the opportunity to ride out any price dips and ideally sell when the market is performing strongly. Additionally, to get the most of a property investment, research is vital to ensure you’re buying the right type of property in the right location.
How to make money through property investment
When investing in a buy-to-let, there are two ways an investor can make money through their property: capital growth and rental yields. If you can earn both, this provides an opportunity to earn money both in the short-term and long-term.
Capital growth is the value the property goes up by. Over the long-term, property prices tend to go up. If prices increase on your property investment, you can earn capital appreciation when selling the property.
Rental yields are the return achieved on a property through rental income. It’s vital to ensure the monthly rent more than covers any costs involved, including mortgage repayments. This can allow investors to earn a monthly income from their property.
Important considerations when investing in property
Investing in property can be expensive at first and tie up some of your money, but it can turn into a lucrative investment. Before investing in property, it’s important to take certain considerations, such as the different expenses that are involved. This includes:
- solicitor fees
- mortgage fees
- Land Registry fees
- survey costs
- stamp duty
If you’re planning to take out a mortgage to help pay for the property, you’ll need capital to put down as a deposit and ensure that you’ll have enough money to cover the monthly repayments. Make sure you’re not overstretching yourself financially.
Before purchasing a buy-to-let investment, it’s also helpful to decide if you want to manage it yourself, which can be a lot of work. Or you can find new-build properties from developers that are fully managed. There are also property management companies that can take care of the day-to-day running of your rental property but be sure to take an account of the cost of these services.
What types of property make the best investment?
Location is key for success with property investment. Research areas with high tenant demand, strong rental yields, employment opportunities, transport links and a range of facilities. Areas with a range of investment and development in the pipeline often leads to rise in house prices.
Additionally, consider what type of property you want to invest, whether a house or apartment and how many bedrooms. Research the different kinds of rental properties in the local area and what rents are going for.
Off-plan property can be particularly good investments for buy-to-let investors. Off-plan properties are typically sold cheaper than new-builds that are already completed. This can lead to earning increased levels of capital growth sooner, and as there are many benefits to living in a new build, it can be an appealing rental for tenants.
If you’re interested in investing in a new-build property in Greater Manchester, check out the property developments Salboy has on offer. It’s recommended to receive professional financial advice when considering any kind of investment to ensure you find the best investment option for you.