Guides Alternative Property Investment Strategies

Are you looking to get into Property Investment? Whether you’re a beginner or a seasoned property investor, there are a number of alternative property investment strategies open to you.

Consider the following property investment strategies and get in touch if you would like more detailed information on the investment types listed.

House of Multiple Occupancy – A Rental Property Investment Strategy

House of Multiple Occupancy (HMO) is a property that is rented by at least 3 people from different households.

Occupants will rent their own private bedroom while sharing the other rooms in the house with their housemates.

As a UK landlord, you can make rental income from the people living in the property. You could also live in the property yourself and share the living costs with the other people living there.

An HMO is an attractive rental property investment strategy because it is less risky than a standard buy-to-let property. With a typical rental property – one that is rented out to one person or family – you are reliant on their sole income. Should they leave the property vacant, you may be out of pocket for a short or extended period. But with an HMO, you will still have the opportunity to make money, even if one tenant leaves, as you should still have other people living in the property.

Property Flipping

Another property investment strategy is property flipping.

The way property flipping works is as follows.

You choose a location that is attractive to buyers, find a low-priced property that is within your price range, and then renovate the property to increase its value. You then sell the house for a profit.

This is an excellent option if you aren’t interested in making money from rental income. However, you do need to commit to research before buying a property as you could lose money if you purchase a house in a location that isn’t in high demand from buyers. You could also lose money if the renovation is more expensive than expected. As such, it’s wise to seek advice from an estate agent and a property surveyor before making a purchase.

Property Development

Property development is the purchase of land or property with the intention of making money from the eventual sale.

You could buy a piece of land and build new properties on it or you could renovate existing buildings into properties that could be sold to home buyers or business users.

You can make a profit if you’re able to buy cheaply and sell at a higher price, but you do need to factor in construction costs and potential problems with the land or property you are buying, as you could also make a loss if you don’t do your homework first.

With this strategy there are multiple ways to make money from your initial investment.

Holiday Rental Investment Properties

If you invest in a property within a popular holiday location, be that in the UK or abroad, you could make money from any holidaymakers wanting to use your property as a holiday home.

This can be a profitable property investment strategy but there are challenges. For one thing, managing the property can be difficult if you’re located a fair distance away, so you may need to hire somebody to manage the property for you.

Trying to attract holidaymakers could also be difficult during off-peak seasons, so you may need to rely on another investment strategy for income in these periods. That being said, the yields on a holiday rental can be up to four times greater than those on a buy-to-let, so you may be able to make enough money during peak periods to keep you financially steady for the rest of the year.

Commercial Property Investments

The term ‘commercial property’ encompasses a wide range of establishments. So, while you might naturally think of office or retail spaces when considering a commercial property, you could also consider gyms, pubs, hotels, restaurants, and many other types of business establishments.

Commercial properties typically require more capital upfront but there is a high earning potential, so you should make your money back and then some!

However, as with other property investment strategies, there are challenges. You might have to deal with multiple leases on one property, for example, if you are renting it out to more than one business. There are also maintenance costs to consider as these could be higher than on a buy-to-let property due to the number of people that will be using the property, from business employees to members of the public.

Before choosing this option, it’s wise to seek the advice of an experienced commercial property investor, especially if you don’t have knowledge of the risks and challenges involved.

Property Investment & Development Consultancy

By exploring these property investment strategies, you can diversify your portfolio and potentially increase your returns. However, it’s important to consider costs, risks, and market conditions before you make an investment decision as you don’t want to make any costly mistakes.

If you would like more information on property investment strategies, please get in touch today. Send your queries to info@johnhowardpropertyexpert.co.uk, and we will reply as soon as we can.