Ways you can invest in the UK property market
Are you itching to invest in the UK property market? Not sure where to start? Simply owning a home isn’t the only way to invest in immovable property – there are a number of ways you can profit.
‘Flipping’ is when you buy a property at one price, perhaps do some work to improve it, and then sell it at a higher price, banking the difference in value as profit. The key to successful flipping is looking for property in ‘up-and-coming’ areas, or those that require a bit of work, but not too much. You should also look for properties that have potential, have at least two bedrooms, and space to carry out work or extensions.
The money you make can then be used to purchase a bigger or more expensive property, allowing you to invest more and reap more when it’s flipped.
The idea with buy-to-let investments is that you purchase a property, rent it out, and then profit from the monthly rent that is paid to you as the landlord. You can either purchase the property outright or benefit from a buy-to-let mortgage. Just remember, you need to consider tax, mortgage repayments, maintenance, running costs and agents fees in your rental yield.
Buy-to-let is a great way to keep a steady income. There are, however, many expenses that need to be taken into account and factored into your budgeting.
Property Company Shares
Investing in property company shares is a great alternative to direct property investment. This allows an investor to invest in immovable property through shares, without owning a house themselves. This kind of investment often includes purchasing shares in a company that holds a large portfolio of property. It is a popular route for those that have a small amount to invest, to begin with, but you do need to be cautious of stock market fluctuations. Researching how to invest in shares of all kinds, not just property, is a sensible starting point for anyone looking to get involved in the stock market, whether in terms of property investment or otherwise.
Holiday homes are properties that are purchased and then rented out at a premium rate for short-term contracts. These are usually per night or per week and command much higher rates than long-term contracts. Properties of this kind tend to be in areas with a high volume of tourists or that are nearby to tourist attractions.
Seaside properties and apartments in city centres are often highly sought after.
Real Estate Investment Trusts
A Real Estate Investment Trust (REIT) finances/owns real estate across multiple sectors as a company. Investors in a REIT can have the opportunity to own or part-own prime real estate and to benefit from dividend income and returns. By purchasing company stock or investing through a mutual fund or ETF, those involved in the REIT get a share of the income produced through the investment.
REITs are tax-efficient, long-term investment vehicles for investors that are looking for a way to invest in real estate without having to purchase outright.
Of course, no kind of investment offers any real certainty and you should be prepared for this before you invest. However, with thorough research and a complete action plan, you should be able to take your first steps into this form of investment.