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Whether you are looking to increase cash flow, or achieve financial security, property investment is one of the most popular investment avenues to go down. This is because property investment is extremely safe and reliable. If you can hold onto your property long enough to see it increase in price, you will never lose money. More and more people, all over the world, are investing in property in the UK. Numerous cities are experiencing unparalleled growth. As a result, investors buying property in the UK benefit from a significant return on investment due to high rental returns, and capital appreciation.
That said, property investment still requires careful consideration. Every investor will have a different budget and different requirements. So, for first-time investors, you may be wondering how much your budget can get you. A common property investment myth is that you need a lot of money. The great thing about property investment is that you do not need a huge budget to access high returns. There are plenty of great investment opportunities out there for a surprisingly affordable price. Then, over time, you can build up a property portfolio. Here are some tips on how to invest in property on a smaller budget:
Buy-to-let investment is one of the most popular investment strategies out there. Investors can generate income through rent and capital growth, meaning they achieve the maximum returns. As with any investment, the budget depends on the type of property you are looking to buy. The size and location of the property will alter the price. However, with buy-to-let investing, you can use a mortgage to help pay for the property. This is ideal for those who have a smaller budget. Buyers can use their funds as a deposit, rather than paying the full price in one go. Thus, making investing much more accessible.
Different locations in the UK not only offer varied potential investment returns, but also different property prices. This is important to consider if you want to know how to invest in property on a tight budget. If you take Liverpool, for example, the city is considered one of the best areas to invest for those on a small budget. Tenant demand is strong due to its high young professional population. Therefore, rental yields are also high. According to the UK House Price Index, average property prices in Liverpool currently stand at £155,508. However, when you look into specific areas in the city and different property types, the average asking price can be much lower.
Therefore, if you are debating if you have enough money to invest in property, make sure you choose an affordable location. For those on a smaller budget, we would advise steering away from Southern cities such as London. It is also worth looking towards emerging locations such as Hull, Sheffield, or Wakefield. Whilst they may not be on the top of international investor radars now, prices are extremely affordable. In addition, the house price growth of these areas is competing with the likes of the major Northern Powerhouse cities.
If you are looking to stay under budget, make sure you are choosing the correct investment type. For example, investing in a property that requires serious renovation and building work is going to push up the price of your investment. A more affordable strategy, however, would be to invest in a new-build or off-plan development. Investing off-plan means you will be able to secure the property at its lowest price. The fact you are buying pre-completion will save you any excess costs. For example, expenses in renovating if you chose to invest in a ‘fixer-upper’. Whilst older, used properties might seem appealing as they are often much cheaper, in the long run, you will be paying more money in refurbishments.
Being a savvy investor means making sure you always get the best possible price. Therefore, you need to keep your eyes peeled for discounts and offers. Plenty of property investment companies will offer discounts to early investors. For example, if you subscribe to the CityRise mailing list, we send out pre-launches, discounts, and premium offers that would not be available to just any investor. Those who invest with CityRise can save thousands by just being active on our Instagram account and subscribing to our mailing lists. That way, you will be the first to know of any offers, discounts, launches, or any properties that come back on the market.
As we always say, it doesn’t matter when or how much money you invest in property, just that you invest wisely. The great thing about property investment is that the longer you hold onto your property, the more it will increase in value. If you have a smaller budget, property is still an extremely accessible asset. You can see exceptionally high returns on a small investment, so long as you invest carefully.
If you cannot afford to pay for the property in full, we would recommend spending time researching the financing options that are available to you.
Whether that is a buy-to-let mortgage or a payment plan, if you are unsure of the avenues available, our team at CityRise can help. You can speak to any of our expert advisors who are well equipped to guide you along the process. Especially for first-time investors with a smaller budget, speaking to an expert could be the difference between average returns and maximum returns.
Get in touch today and you could be well on your way to financial freedom.
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