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Different Property Investment Strategies for the UK Property Market

  • Mark Edwards ·
  • 0 Comments ·
  • October 29, 2019

On the one hand, there are two compelling truths about the UK property market which keep investors very interested in it.

Firstly, everyone needs somewhere to live (and/or work) and secondly, there are plenty of people (and arguably even more companies) for whom renting is far and away the most sensible option, at least in certain periods of their lives (and these periods can be very lengthy).

On the other hand, property investors are all people and as such are individuals. This means that an investment strategy which is just perfect for one person in their particular situation may be completely unsuitable for another.

Fortunately, the UK has a wide range of property-investment strategies to suit all different investment goals. Here are four of them.

Focus on Commercial Property

You never actually own a commercial property the way you may own a residential property and you don’t really get any say in management decisions (because commercial property is invariably managed by a third-party company) but if all you want is hassle-free income then commercial property can be an excellent choice.

Focus on “Brown-Field” Redevelopments

The UK’s “green-belt” areas are highly prized and while building on them is not impossible, it is highly controversial and generally avoided when there are other options, such as the conversion of brown-field sites.

For practical purposes, this typically means taking unused commercial/industrial units and converting them into residential (or mixed-use) developments. There are three basic approaches you could take to implementing this strategy.

One is to look for property to buy and convert yourself. Second is to look for property to buy yourself and then sell on to a property developer for them to convert. Third is to look for property developers who are undertaking brown-field developments and invest either in the developer themselves or in the specific development(s) e.g. by buying off-plan. If you want to learn more about community development, look up Paul Ognibene.

Focus on Short-Term Rentals

The short-term rentals market isn’t “just” about holiday homes, although this is definitely a significant chunk of it. There is also heavy demand from other sectors such as students (particularly language students) and business people.

Investors specifically targeting the holiday-rentals market might want to specialize in properties located in scenic, rural locations as these could be more affordable than properties in cities.

Investors who want to tap into all short-term markets (or at least have the flexibility to do so) will probably need to look at city properties. In either case, be prepared to do lots of hands-on management or to hire someone else to do it for you.

Focus on Houses in Multiple Occupation

HMOs are heavily-regulated even by the standards of the UK residential-housing market (and these days that’s saying something) but not only is there massive demand for them, there is also the fact that the nature of HMOs means that they almost always generate some income and only very rarely have total voids.

It’s also worth noting that even though HMOs are intrinsically associated with the student market, in actual fact, there are a lot of young professionals who are perfectly happy to go on living in them long after they’ve graduated.

P.S. Many thanks to Indlu for providing this valuable material. Indlu are estate agents in Manchester offering a no sale, no fee estate agency service in the North West as well as a free online house price estimate to find out how much your house is worth.

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