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Property is widely considered one of the strongest forms of investment. While it does not offer the fast growth which can be found with cryptocurrency or stocks, it is a far more secure form of investment. This is because it is a tangible asset and with a growing population, the demand will always be there. On average, property prices have grown by £95,000 in the last decade, showing significant capital growth. Additionally, rental income can help the investor profit while the original investment is made.
OnTheMarket reported that landlords could gain up to 20% more rental income if their property is furnished. This is because it saves the tenants considerable money. Furniture must be durable, comfortable, and stylish, as landlords look to reduce potentially high-cost replacements and repairs. However, despite lower rents unfurnished apartments can offer landlords peace of mind, as they are not liable for any repairs or replacements.
What Property Types are Available?
An off-plan property is a building which has not yet reached completion. This offers landlords a chance to benefit from lower entry costs, as the price is usually below market value. Once the property completes, the asset will rise in value, meaning immediate capital appreciation. Additionally, off-plan properties offer high yields as they are built to the latest specifications and often in key areas of interest.
Off-market investments are when a property is in development but has not yet been listed publicly. Therefore, this offers investors an opportunity to benefit from securing preferred units and lower entry costs. The investor can request additional information such as brochures, unit breakdowns, building renders and project timelines. This helps them to make an informed investment. However, it is best to use an investment agent to secure an off-market opportunity.
A home of multiple occupants, better known as a HMO is a property which is rented out to multiple tenants simultaneously. Subsequently offering more rental income and higher yields as rent is divided on a per-room basis. This is often found in the form of student accommodation. Some areas are under the article 4 direction, which means an area cannot have new HMOs as the government look to reduce them. Additionally, the tenants in HMOs can be very difficult to manage, as tenancy agreements can be broken and internal conflicts between tenants can create a hostile living environment. Also, HMOs are far harder to resell than residential property as demand is lower.
Should You Use a Property Management Agency?
For landlords looking for a hands-off experience, property management services can offer them just that. Inexperienced landlords can often make costly mistakes which reduce their return on investment. Therefore, often they will secure the services of a lettings management agency. This comes at a small cost, usually a small percentage of the monthly rental income. However, this can save the landlords a lot of time and money in the long term. Additionally, any maintenance or repairs will be arranged by the management company. The agency will normally negotiate the best fee on behalf of the landlord.
CityRise is a property investment agency that aims to help investors find opportunities to achieve their goals. Once an investment is found, the investor will be guided through the journey step by step. This is a hassle-free process and with years of industry expertise, the investor is in safe hands. Once the deal reaches completion, CityRise can also provide high-quality lettings management. Then, if the landlord looks to resell their unit, CityRise will handle the sale of the property securing a profitable return. Find out more, here.
Find out how to purchase a buy-to-let property, here.
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