Introduction
So, you want to invest in property? Great! It’s a great way to generate passive income and build wealth. But it can be hard to know where to start, especially if this is your first time. Luckily for you, we’ve put together some of the best advice from our very own experts on how to get started investing in real estate.
Property investment is a high-yield way to generate passive income. But there are many strategies involved.
First, let’s talk about the benefits of property investment. There are several reasons why people choose this method of generating income:
- The chance of earning an above average return on your capital investments (ROI)
- It can provide you with long term security and growth opportunities
There are many ways to invest in property. Below are 3 core strategies worth investigating.
There are many ways to invest in property. Below are 3 core strategies worth investigating:
- Buy-to-let
- HMO (houses or multiple occupancy)
- Flips
Buy-to-let is the most popular method, as it provides a steady income and has little risk of capital loss if you buy well and manage your property wisely
HMOs can provide an excellent yield on capital, but require more management skill than buy-to-lets
Flipping is an interesting way to make money out of property, but there’s also a high level of risk
Buy-to-Let
A buy-to-let property is one that you purchase as an investment. You can then rent it out to tenants who will pay you a monthly rent, which can be used to cover the mortgage and make a profit for yourself.
Many people choose to invest in buy-to-let because it offers them the chance of generating passive income on their investments. This is because once the initial costs have been paid off, they don’t need to put any more money into the property; they just collect their monthly rent cheque.
This form of investment has its pros and cons but if done right, it can be incredibly rewarding.
HMO (houses or multiple occupancy)
If you are looking for a high-yield investment, then HMOs (houses or multiple occupancy) may be right for you. These properties can be great because they offer the chance to earn passive income every month.
HMOs are a great investment because they can be rented out quickly, which means you can start earning a passive income from day one. However, there are some drawbacks to consider before deciding to invest in an HMO. For example, if the property is located in a bad neighbourhood or near schools that have been shut down due to poor performance scores, this could lead to lower rental rates and therefore less profit for you.
HMOs can also be more difficult to manage than single-family homes because they require good management and often more maintenance. This can include things such as making sure the property is clean and ready for new tenants when they move out, making repairs and upgrades where necessary, and dealing with any other issues that may arise during their stay.
Flips (buying to renovate and sell for a profit)
Flipping is the idea of buying a property and renovating it for a profit. As with all real estate ventures, there are upsides and downsides to flipping. If you’re considering flipping properties as a way to make money, here’s what you need to know:
Advantages
- The main advantage of flipping is that it can be fast—the faster the turnaround time between purchasing and selling, the shorter your holding period (and thus your finance costs).
- When done right, they can provide substantial cash pots for future investment.
Disadvantages
- Profit margins can be quickly eroded by paying too much for the property, or under-estimating renovation and finance costs.
- It’s also crucial to understand market demand and provide a product that people want to buy – falling foul of this seemingly obvious step could be substantial.
How do I start?
Start by looking into local market conditions so that when you identify your next flip opportunity, you know how much competition exists at any given time! Then once you’ve identified several potential homes which meet all your criteria including location type size price etc…then go ahead and begin viewings and making offers.
Investing in real estate will generate passive income if you put in the early work!
If you’re looking to generate passive income, real estate is a great option. However, it can be risky and requires work.
If you decide to invest in real estate, make sure that you do your research first. Make sure that the market is stable and that there are no upcoming disruptions in the area where your property is located. You should also look into whether or not there is demand for this type of property in the area before purchasing it since investing in an overinflated market could hurt your return on investment (ROI).
Conclusion
We know this can be a lot to take in, so if you have any questions or need help getting started with your plan for property investment, don’t hesitate to reach out! We’re here to help.