If you are looking to plan a property investment strategy, chances are you already know some things about the market. Property investors usually take the required steps before securing any investments, which includes creating a stable strategy. Regardless if you are just starting, or have experience in the property investment world, you will need a clear plan for your investments before you part with any cash to allow for optimal success.
Perhaps you are at the stage where you ready to form your first property investment strategy or you are looking to improve an existing one. Either way, we have put together some tips for you to consider when planning, in the hope that it helps you execute the perfect strategy. Start by asking yourself these three fundamental questions featured below.
Why Are You Choosing to Invest?
First and foremost, think about your reasons for investing. Why are you looking to invest, and is the property market the right investment for you?
As part of putting together a property investment strategy, you will need a clear goal in mind that will support your decisions along the way. It’s essential always to revert back to this if faced with building challenges or financial difficulty. For many investors, compiling a property portfolio is a way to prepare for the future, as assets can be used for retirement funds or to pass down as an inheritance. Investing can also be used to generate additional income in the short term via rental properties and pay for luxuries such as holidays or new cars. No matter the reason for choosing to invest, make sure you are clear on your end goals and how you want to achieve them as this will impact the type of properties you invest in.
How Can You Get the Best Returns on Your Investment?
Understanding the importance of rental yields and capital growth is crucial when selecting property investments and achieving the best returns. A significant step in your strategy should be to find the best opportunities on offer with the potential of strong returns when searching the market for available properties. If you are striving for high rental yields, then location is key. By choosing the best area for your property investment should provide you with success in the future on your rental returns and capital appreciation.
Property in the UK, for example, specifically in the north-west of England offers investors the highest yields in the country and some exceptionally lucrative deals. Cities in the north-west are doing particularly well due to the amount of regeneration, enticing property developers to introduce exciting new projects to the market. If you are looking for modern off-plan developments, RWinvest is offering 8% yields on their Parliament Square properties, developed by the well-known Legacy. As well as great rental yields, there are high expectations for growth too, which is down to its highly sought-after location in Liverpool’s trendy Baltic Triangle.
Have I Selected the Right Strategy?
When it comes to selecting the right strategy, it is all about researching different properties and choosing the one best suited to you. Buy to let is one of the more common approaches to property investment, but does it fit within your strategy and meet your goals?
Buy to let investment can be hugely beneficial as it can offer both short-term rental payments and long-term capital gain, with increased house prices when you come to sell the property further down the line. To maximize returns on this type of investment, you will need to play the long game, in which case this may not be the choice for you. Perhaps you have experience in building or renovating properties, and so you could opt for a Buy to sell a property which will give you a much quicker return on your investment.
Both investments will require some thought, as these opportunities can be pretty hands-on, especially if you are thinking about fixing up a property or becoming a landlord. Having said that, you could also incorporate additional costs into your strategy to cover the expenses of builders or hiring a property management company to take care of the rental agreements.
It’s essential to take into account the tips mentioned above when putting together your property investment strategy to ensure it is the right fit for you.