Property as an investment is one of the world’s most secure asset class, but it is important to understand the market and how different types of investment opportunities are governed by different factors. When you have the right investment type, location and demand, it can be highly profitable for the investor. Some investors enjoy property investing on a small scale, whilst other are full-time and go on to build a significant portfolio. Whatever your circumstances and goals, you need to be aware of all the different types of property investment and which will be the most beneficial for you.
Off-Plan Property Investments
One of the big shifts in property investment in the last 20 years has been the rise in popularity of off-plan property investments. Off-plan investments are developments that are purchased prior to the building being completed giving an instant rise in capital value of property – the purchase price of off-plan property is generally well below the eventual market value on completion. Furthermore off-plan properties are generally fully-managed by the developers or a management company, making it a hassle-free and hands-free investment. The rental income is assured for 5 – 10 years and net yields can be as much as 10% depending on the property.
Student Property Investments
Student property investments have been one of the UK’s strongest performing asset classes for a few years and this type of investment is increasing in popularity all the time. This is because new purpose-built student accommodation (PBSA) provide student tenants with a higher standard of living than the old HMOs and student houses. The ideal locations of PBSA and luxurious living spaces makes it appealing to UK and overseas students, who are willing to pay more rent for innovative, high-spec apartments and student ‘pods’.
With student numbers growing across the UK as universities accept more students per course. There has also been a surge in overseas students coming to study and live in the UK. Student accommodation investments are also recession-proof because people won’t stop getting an education just because of the economy’s status, which means that is it safe and risk free. For yields as high as 9%, look at areas in the north such as Liverpool, Manchester, Leeds, Huddersfield, Newcastle and Sheffield.
Care Home Investments
Care home investments are another newer type of property investment that have become more mainstream due to the fact that they too are increasingly lucrative for investors. Care home investments are in fact the fastest growing property asset class in the UK. This is all down to the growing demand. The UK’s population is ageing, which means there are more elderly people living in the country. Many of those over 65 are looking for a place to stay with health and social care assistance as well as a fuller, more independent life. Seniors can find these needs met in a luxury care home.
Care home units are popular with investors due to net yields of up to 10% per annum. The UK’s ageing population means that government reports show care home demand is so high that the number of care home places will need to double over the next 25 years. That means that now is the best time to invest in a care home unit. The long-term, low risk, high reward investment assures high net yields of up to 10% as well as buy-back options above purchase price after a set number of years.
Buy-to-let property investments cover a range of property investments, which can include commercial, but mostly refer to residential properties. Buy-to-lets are probably the most common type of property investment, and it is what most investors choose for their first property investment because it is fairly risk free.
At Sterling Woodrow, we offer off-plan buy-to-lets which offer good opportunities for instant capital appreciation upon completion, or existing buy-to-lets that are being renovated and relaunched. These existing buy-to-lets may even already be tenanted. All the property investments offered at Sterling Woodrow are thoroughly researched and focus on getting the best returns for our clients, so many of our buy-to-let investments focus on areas in the north, where properties are affordable and yields are high, compared to London and the south-east. The best locations at present are the Northern Powerhouse cities such as Manchester, Liverpool, Newcastle, Middlesbrough and Sunderland.
This is a popular option for first-time buyers as well as a safe zone for experienced investors simply because the demand will always be there if there are people wanting to live in the area. The UK housing market has been known to go up as well down, but don’t let the overall fluctuating market put you off, as in some areas, such as the North of England, the rental yields are higher than ever. It is important that investors do their research to find promising locations that aren’t too over-saturated with expensive residential properties, because these are the areas that will provide the best returns as well as a bright future in the property market.
The UK population grows at a rate of 400,000 a year and all of these people need to be housed. For this reason alone, a residential property investment is a great choice. Many investors will think that residential properties are hard to sell because of the competition, however, we can sell a residential property in less than four weeks in the right area. For an easy and secure mid to long-term investment with a chance of high yields and capital appreciation, speak to us about residential investments.
Hotel Property Investments
Hotels property investments are in such high demand because global traveler numbers hit 1 billion each year. This essentially means that demand for hotel rooms equals a 6th of the world’s population. A hotel investment would be ideal for savvy investors who are looking to expand and diversify their portfolios.
Hotels offer great returns because of the high rates, which you won’t often find with other types of accommodation. For this reason, it has obviously become a popular investment for those looking for high yield returns.
As with all property investments the important factor for hotel investments is the location. You want to choose a place where you know people want to visit.