When it comes to property investing, there are strategies best left to those who have expertise in the area.
In this article, we will take a look at a number of those strategies. We’ll also explore why even the most experienced of investors come up against roadblocks along the way. First though, here are a list of those strategies that experienced investors should certainly be considering:
Strategies for experienced property investors
HMO’s (Houses of Multiple Occupation)
Despite local authorities creating even more hoops for the HMO landlord to jump through, this is still one of the highest yielding strategies out there. And the more rooms you can rent out, the more tenants you’ll get, and the higher your rental income will be.
These ‘hotel alternatives’ are becoming extremely popular thanks to the likes of Airbnb, who have shown that hotels don’t have the monopoly on short-term holiday stays, or even short-term lets or corporate contracts. Serviced apartments – because they provide more amenities than a standard apartment let – are also higher yielding.
Also known as ‘flipping’ or ‘buy to sell’, renovation properties are definitely for the experienced investor – preferably one who already has a network of contractors they can trust. This is when you purchase a below market value (BMV) property (usually because it’s pretty dilapidated) then renovate it to an improved condition to sell it on, making yourself a tidy profit in the process. The experience here comes in managing costs and the build schedule.
Conversion of commercial to residence property
It’s permissible these days to turn offices and retail units into residential properties. There’s no stamp duty on commercial properties and they tend to be less expensive to buy in the first place. The bigger the premises, the more potential to increase the number of residential units available.
Right now, UK property is proving extremely attractive for foreign investors - thanks to the low value of Sterling compared to other currencies. It has resulted in more UK investors adopting this type of strategy – particularly in high-end areas of the capital, where they will purchase, renovate and refurbish, then sell on apartments and homes to non-UK nationals. They will then manage them i.e. find tenants, collect rents, attend to maintenance issues etc.
Unforeseen road blocks you may encounter
Converting commercial to residential
Although planning permission isn’t necessary to do the actual conversion of use of the building, some local authorities may insist on pursuing this avenue, to ensure there is enough office or retail space should that particular market pick up again. Also, permission will be required for certain areas of the conversion, such as doorways, windows and cladding.
Those used mainly for holiday lets can be lucrative (although tiring – there is a lot of marketing involved). But a big hurdle for this type of strategy is finding someone to give you a mortgage in the first place. Certainly, you won’t get finance from your traditional high street lender (and bridging finance would just prove too expensive over the long term).
Speak to a specialist in investment properties.
Call 0333 123 1330