Property is one of the most lucrative assets to consider when it comes to investing. Unlike other assets like stocks and shares, property allows you to make a return on your investment in more ways than one — with both rental returns and capital growth. Before going ahead, however, it’s important to ask yourself whether you’re ready to invest in property.
Your Financial Status
One of the main deciding factors on whether or not you should make a property investment is your financial status. If you’re not currently financially stable, it’s a bad idea to commit yourself to purchasing a buy to let property. While some property investments allow for a buy to let mortgage to be used, some companies expect you to pay for the property in full. If you don’t have the money needed, it might be worth waiting until you’re in a better financial place. The same goes with buy to let mortgages, as you need to be sure that you’ll be in a good place financially both now and in the future in order to keep up the payments.
If you do feel that you have the money needed to make a purchase, then it’s crucial that you do your research. Without thorough research, you could end up making an investment that doesn’t bring you the type of returns you wanted. Research every element you need to think about before making your first property investment. Property experts like RW Invest offer in-depth guides which can help you work out the best steps to take. Out of all the research you need to undertake, location comes out on top. Look for investment opportunities in the areas with the strongest property markets in terms of rental yields and capital growth.
Where Should You Invest?
If you’re investing in the UK, figures show that the north-west region is home to the most lucrative property investments. Liverpool and Manchester, the key cities of this region, present some of the highest average rental yields in the country. The north-west also boasts the best rates of house price growth over recent years, with predictions for continued growth by 2022. Those investing in the UK should seek out opportunities in these cities, avoiding London which presents dwindling statistics in comparison.
Budgeting Your Money
Think about your budget, and whether the money you’re willing to spend on your investment is feasible. Those with a lower budget tend to look towards student accommodation rather than residential investments. These type of properties are typically lower priced, but still come with the potential for high yields thanks to the demand for student accommodation in the UK. If you’re adamant that residential property is the investment you want to make, but you don’t have a large budget, location plays a part in this.
Along with rental yields and capital growth, Liverpool and Manchester’s property market is also considered one of the UK’s most affordable. In these cities, you can purchase a residential property for under £100,000, while you’d struggle to pay below £300,000 for the same type of property in London. Alternatively, if you do have a higher budget, you can benefit from purchasing multiple properties in these areas for the price of just one in London, growing your property portfolio more quickly.
Once you’ve done your research and decided what type of property you’d like to invest in, it’s time to weigh up the pros and cons. The main cons of property investment are the fact that the market can fluctuate depending on the current economy or other factors, and you also risk suffering from void periods if you can’t find tenants for your property. However, if you’re wise with your investment, buying a property in an area that’s predicted to stay strong over the years and attract a steady stream of demand, the benefits well outweigh these risks. If you have the funds, the necessary skills, and the drive to meet your financial goals, you might just be ready to take the plunge into the world of property.