There are stories all over the news about high returns on the property market. After a long, hard slump, property prices are on the rise. And they’re going up fast. In big cities like London, many owners are reporting an annual price increase of £50,000 – £100,000. Their houses are earning more than most people’s yearly salary! That’s all without doing any work or renovation.
With the housing market in this state, it seems obvious to many that investing in property is the way forward. Today we’ll look at whether that is the reality and whether you can benefit from it. Investing in property is a lucrative move, but it is not without its dangers. It is certainly not a risk free choice and getting it wrong can land you in a lifetime of debt. Take your time and make all the right choices. Here are our top tips for investing in property.
Play the long game – Our safest tip is to simply play the long game. Over time, the property market has seen a strong drive upwards. Of course, there are many slumps along the way as we discovered over the last five years. However, playing the long game means that you’ll ride out these slumps and reach the other side. Holding onto your property for ten, twenty or thirty years will almost guarantee you an increase in value.
Renting – Renting your property out to tenants is another tried and tested money maker. However, it starts to get a bit more risky here. It all starts with a strong real estate investment in the best possible property. You’ll need a thorough understanding of the area you buy in. Know your target audience and cater for them. Is it students, professionals or business elites? Will you manage the property and tenants yourself or pay a property agency to do that? The returns will initially look high on paper. But, good property investors tell us that they set 50% of rental income aside for problems and costs. Does the remaining 50% give you a profit?
Renovate and flip – For those who love getting their hands dirty and relish the chance to do some DIY, this is your option. Again, this is not without its risks. In fact, this is perhaps the riskiest of the lot. You need to understand the market in order to buy at the lowest price possible. You’ll need to understand the renovations that add value and those that don’t. More importantly, you’ll have to do it fast and move forward at the right time. It’s a complex art form, but lucrative if you get it right.
There is money to be made on the property market. Lots of it. Just make sure that you have a strong game plan. Do as much research on the market and the location as possible. Location is the single most important factor in your strategy here. Try to target the areas that are on the rise and avoid those that are crumbling. Finally, always have an exit strategy and make the money when you buy, not sell. That means always buying at the lowest possible price. Ready to get rich on the property market? You’re all set!
Categories: Real Estate