The property market has boomed in the last few years, with house prices rising and the demand for properties soaring. Eye-catching headlines and uncertainty about the cost of living have got some thinking about investing for the future. Buying and selling real estate is one of the oldest investment opportunities out there but it remains one of the most popular. If you’re interested in getting into the property game, here are some innovative ways to turn a profit.
Taking on a project
UK house prices increased by over 10% between 2020 and the start of 2022. In some areas, prices have shot up by over 30% since the start of the pandemic. When prices are high, opportunities to make money from buying and selling within a short period are limited but there are ways to make a profit. One option to consider if you want to invest, but you don’t want to buy when prices are peaking is to take on a project. Projects can represent real estate bargains if you make the right call. Search for a rough diamond and make sure you calculate costs before you put in an offer. There are several different types of projects, which involve varying levels of work. Some properties only need a lick of paint and new wallpaper and flooring. Others require a major overhaul with new electrics and heating systems as well as a cosmetic revamp. Explore different options and think about your main objectives. Are you looking to flip a house very quickly, or are you hoping to hang onto the property for a while and rent it out? Get quotes for all the work you plan to do and be prepared to negotiate. Focus on adding value and keep a close eye on the market.
Investing in real estate doesn’t just include purchasing houses and apartments. It also covers buying and selling land. Land is increasingly sought-after. This is because more and more people want to build their own homes and there has been a surge in the demand for rural real estate. If you own a house with a large plot, or your home is surrounded by fields, you may wish to think about selling the land for development. Alternatively, if you’re looking for an investment opportunity, you may want to explore plots for sale in the local area and develop them. This is often a more complex form of investing, as you’ll need to secure the right permits and permissions, but it can be incredibly lucrative. Take some time to research before you start looking for land and visiting plots and learn about the processes involved.
Buying to let
UK rental prices increased by 3% between June 2021 and June 2022. Renting is common due to difficulties getting onto the property ladder and the rising demand for housing in some parts of the country. For many, renting offers a flexible solution or an alternative to buying for people who are not ready to put down roots and those who can’t afford a deposit or a mortgage. As an aspiring investor, buying to let offers an opportunity to put money into an asset, which will generate an income for years to come. If you’re looking for a long-term investment, this is an excellent choice.
When investing in a buy-to-let property, it’s essential to define an ideal tenant and tailor your search accordingly. Consider what kind of property would appeal to them and where they would want to live. Analyse and evaluate local markets and gauge the level of demand. If you can’t afford to buy in established rental hotspots, look for up-and-coming areas. If you’re targeting young professionals in an urban area, for example, it’s a great idea to look for signs of development. New transport links, housing and hospitality, leisure and entertainment venues are positive signs. If you’re buying with a family in mind, research local schools and amenities and look for properties that have a garden, on-site parking and spacious living areas.
If you find a property that seems to fit the bill, take the time to get valuations and quotes for rental fees before you proceed. Calculate the rental yield and make sure the figures add up. Use your head rather than your heart. If you’re buying to let, an emotional connection is less important than the potential to make money.
Buying a second home offers two main options for investors. The first is to let the house or flat out to a tenant. The second is to use it as a holiday home. If a holiday house interests you, location is key. Analyse data and identify sought-after areas. Search in places that have a strong local market and consider what holidaymakers are looking for. If you’re hoping to attract visitors to the coast, for example, sea views and easy access to beaches and popular resorts and seaside towns will boost rental prices and increase the chances of finding customers. If you’re buying in a natural beauty spot and you’re keen to capitalise on the popularity of staycations, consider adding extras such as a hot tub or an outdoor stargazing deck to set your home apart. Research prices, analyse the competition and use market research to determine what people want and how much they’re willing to pay for different types of accommodation and levels of luxury. It’s essential to remember to focus on the figures when you’re buying an investment property.
Investing in property is a popular option. If you’re looking to get into the property game, there are multiple avenues to explore. Consider your primary objectives, set a budget and define your ideal buyer or tenant before you start your search. Think about whether you want to take on a project and fix up a house, buy a holiday home, buy to let or sell land. Carry out extensive research, keep an eye on the market and look out for new trends. Take the time to view properties and calculate figures and make sure you choose the right time to buy or sell.