The Most Common Questions About Property Investment Answered
If you want to put your capital to work and improve your retirement options, then investing in property makes for an obvious choice. Unlike the velocities of the stock market or the unknowns of digital currency, property quite literally offers a solid asset that’s backed by a tried and tested format.
After all, not only do you have the option of living in any property you invest in, but due to the UK homes shortage, your asset will be in strong demand offering buyer confidence. Furthermore, data suggests yet more projected house price increases are on the way in the future. Such gains will then be reflected in any rental yields you’ll receive as a landlord, not to mention within the eventual resale value of your property.
However, even though property is an extremely popular form of investment, that doesn’t mean everyone always has all the answers. So in today’s post, we’re here to debunk some of the most common questions asked about property investment to guide you.
Remember, if you don’t see your question below and you’re keen to find out how investing in property could benefit your portfolio, we’re always here to help. Please see our contact information at the end of this post to find out more.
Property Investors UK: An Overview
- Average house prices in the UK reached £260,000 for the first time in March 2022 – The Guardian
- There are now 2.7 million buy-to-let landlords in the UK, a rise from 1.8 million in 2015 – Ludlowthompson
- Average rents paid by tenants rose by 2.3% in the 12 months to February 2022, representing the largest increase since December 2016 – ONS
- The average UK rent now stands at £1,078 PCM – Homelet
- The average house price is set to grow by £40,000 in 5 years’ time – Savills
Is Property Still A Good Investment?
There’s no better place to start than answering this age-old question, and spoiler alert, the answer is yes!
The fundamental reason is that people are always going to need a place to live. Given what we’ve mentioned about the housing shortage, this issue isn’t going to be fixed anytime soon. Furthermore, the UK is currently experiencing a housebuilding slowdown, and with supply shortages on site including the fundamental basics such as bricks and mortar, the supply/demand issue is set to rumble on.
If you’re familiar with our blogs and investor resources, you’ll know that we regularly publish the latest news and data on all things property. For those who have been following the latest news in the UK property market, property prices and rental yields are currently at an all-time high, with no sign of things slowing down. This is despite a tumultuous time on paper following Brexit and the pandemic – yet property has continued to demonstrate its unshakable robustness.
Likewise, Dubai reported the highest rental yields of any global city in 2021, averaging 9.19%.
Thirlmere Deacon has investment opportunities available in Dubai starting at just £128,000. As well as having lower entry rates compared with the UK, the growth in Dubai is one to watch as the city continues to expand – particularly as its tourism industry has made an excellent recovery and is one of the key players of the city’s economy. All of which keep pushing those rental yields up and us as we regularly report in our blogs.
So, in summary, yes, property has always been a great investment, and future projections show there’s no sign of things changing anytime soon.
How To Start Property Investment
Undoubtedly, the best place to start any investment journey is to identify your goals and do your research before actually making an investment. That way, you can start off with a clear vision of what you want to achieve and how you actually plan on doing so.
Some of the basic questions may include:
- What is the reputation of the developer?
- What kind of area is the property located in, and will this reflect positively or negatively on my investment over time?
- How much capital is required to secure the property, and will the projected rental income cover my ongoing costs?
- Will I be managing the property, or do I need to hire a property management company?
- If I will be managing the property myself, do I fully understand my responsibilities as a landlord?
- Do I have the right financial advice to make a good investment decision and manage my investment over time?
From there, you can quickly determine what will be the right next steps for you, and find opportunities which match these goals.
What Type Of Property Is Best For Investment?
Every investor is going to have a different set of criteria that may make one type of investment more suitable than another, especially for where their financial and commitment level is at this point in time.
Although there are lots of property types (i.e. residential buy-to-lets, student accommodation, commercial lets etc.), one element you should consider is the timeframe. Specifically, whether you are looking to quickly flip a property or, as we encourage here at Thirlmere Deacon, to play the long game.
When it comes to residential property especially, we know that property values and, therefore, the rental incomes that can be attracted have an extremely healthy outlook over the longer term. So if you’re looking to achieve the maximum return on investment, purchasing a well-built property in an up and coming area and also allowing that property to reach fruition is the way to go.
In contrast, flipping a property can offer instant financial results but doesn’t allow the potential value to be reached over time. So, you really need to consider what you are looking to get out of the process, ensuring your approach suits this.
The classic approach is to purchase a buy-to-let investment, which, as the name suggests, means you purchase a property with the intention it will be let out. The rental income will help cover costs associated with the property and will often be enough to generate a profit simultaneously. All the while, the property will increase in line with inflation over time, meaning that when you do eventually sell, you will likely recover your initial outlay while gaining an additional profit, minus any taxes and expenses.
There are many calibres of buy-to-let properties, including doer-upper properties. But something to remember is that in today’s markets, tenants are looking for a place that is reflective of the higher rents they pay.
Our Wardour Point opportunity in Manchester is an excellent example of what we mean here, as it features a state of the art build quality and excellent on-site features. For landlords, the lack of upkeep required with such properties is also hugely attractive, as it means that over time, your investment will be working harder on your behalf.
Short Term Lets
In a similar vein to hotel room investments, short term lets, including the likes of Airbnb, have the potential to earn some serious revenue.
Although it’s possible to purchase a short term let anywhere, we recently brought you information on the Liverpool short term let market. With over 54 million tourists visiting the city per year, we calculated that the potential average rental income from a short term let is £26,500. Given the lower cost of property in Liverpool versus London, this isn’t bad going.
As a landlord, short term lets offer more flexibility. In Liverpool, landlords also aren’t restricted to the number of days they can let out their short term let, and you can even choose to live in the apartment during void periods. There’s also far less hassle and expense to contend with versus regular lets, other than ensuring the property is left in a clean state for your next guests. There are, of course, management and cleaning companies which can take care of this for you also.
Is Property Investment Worth It?
Yes! Compared with not investing at all, it’s always going to be worth putting your capital to work, especially if you choose the right property investment for your needs.
So long as you do your homework before investing and make sure you keep on top of any existing investments, you are far more likely to have a successful experience. It’s good to emphasise once again that property investment should always be thought of over the longer term, as this is where the real gains can be made due to the incremental market movements.
Property Investment UK – Buy-To-Let Opportunities Starting At £75,000
Are you interested in investing in property? Thirlmere Deacon is a property investment company with offices in London and Dubai.
As well as property in the UAE, We have investment opportunities available spanning the length and breadth of the UK, including Birmingham, Hull, Liverpool, London, Luton, Manchester, Newcastle, Preston and Sheffield.
With our investment opportunities starting at just £75,000, and rental yields well above the national UK average, we have something to offer investors of all calibres.
If you’d like any further advice on anything we’ve mentioned above, or if you are considering investing in one of our opportunities, please drop us a message or call us on +44 (0) 2039507939.