Are you worried about how the global pandemic will affect your current investment portfolio? If so, it might be time to shift your assets to a more stable option, such as investing in real estate, as it can offer secure growth if invested for a long period of time.
The demand for rental tenancies and increasing house prices has ensured great capital growth for many investors, and so there has never been a better time to invest your money in real estate, especially if you’re looking to invest in the UK, where cities in the north, in particular, are flourishing.
The property market provides a less risky alternative to other investment options at the moment, such as stocks and shares, and can produce highly lucrative returns as well as a second source of income if choosing a buy to let investment. For example, many older generations are looking to invest their pension money or savings into real estate in order to reap the high returns and generate further income long after they retire. For younger professionals, some look to ‘flip houses’ and make real estate their full-time job, either way, as an investor you will want to acquire as much information as possible about the current market, and the best areas to invest.
For those contemplating the matter, we’ve put together some of the advantages of investing in real estate in the UK, and how it can help you succeed in the future.
In recent property news and according to The Guardian, back in July, the UK housing market had its busiest month in more than ten years, with more than £37 billion real estate sales accepted.
While the demand for real estate has no signs of slowing down, it’s no wonder investors are rethinking their portfolios and opting for a more tangible asset as opposed to stocks, where there have been monumental dips in the market following the pandemic.
As the market continues to grow, you can be sure to receive high returns for years to come, but in order for this to happen, you will need to choose the right place to invest. Some of the most highly sought after real estate investments are in the city centres as you can benefit from the continuing developing in and around the area which will only add value to your investment and attract tenants for years to come.
Cities within the UK, more specifically in the north of England, are profiting from a vast amount of regeneration projects that have helped transform the city. In Manchester and Liverpool, not only are people enjoying the new business, leisure facilities and cultures that it brings, but the impressive investment stats provide another reason for young professionals and students especially, to want to move and live in such an aspiring urban area. This is why many real estate investors are choosing modern new developments in places such as these.
3) Choosing the Best Property Type
As there are so many property investment types to choose from, most people usually go with the one that generates the highest income, typically, buy to let. This is a preferred investment for many developers living in Britain and overseas, as it provides a physical asset to rent out and generate consistent income in the short term, as well as being set to gain value over a longer period of time.
There are further decisions to be made in terms of what type of real estate you would like to rent out, with luxury one to two-bedroom city-centre apartments being the more lucrative option. Be mindful of the type of tenant you wish to target and whether or not they are suited to your chosen area and development plans.
4) The Buy to Let Hotspots
There are a whole host of cities throughout the UK that provide buy to let hotspots, but you want to ensure you invest in real estate that’s right for you, one that you can afford in a location that potential tenants want to live in. Areas such as Liverpool and Manchester are booming at the moment, and there are some great deals, with promising returns to be had for future investors.
The success rate for buy to let the rental yield in that area determines investment. High rental yields mean there is a growth in demand for real estate in that area and likely that there will be further regeneration in the coming years. Award-winning property investment company RWinvest notes Liverpool to be one of the best places to look to moving forward.
5) Second Source of Income
Real estate is a long-term commitment, that is if you want the best returns on your investment. Providing you are happy to have your capital tied up in your asset you will still be able to take advantage of a consistent secondary source of income through rental yield payments, which can be used for other investment opportunities in the future.