Different types of real estate investments
When it comes to becoming involved with real estate, the options open to you can feel overwhelming, especially if it is all entirely new to you.
This becomes even more complicated when you consider just how much money you will likely be investing into your real estate (and, in turn, the type of return you hope to achieve on this investment).
To help you begin your path of real estate investment, we have put together some of the critical real estate investments and more information on them to help you decide whether or not they may work for you.
Residential buy to let
One of the most common forms of property investment that you can make is a residential buy-to-let. They are popular because this type of investment can have lots of benefits, and you can make it work with your budget too.
Some of the main pros of choosing residential buy-to-let include the following:
- Lots of choices when it comes to properties
- High demand for properties from tenants
- Rental income can rise in certain areas
- You can buy properties at a low cost
- A long-term investment
- You can sell the property when the time comes
- Student rental properties
Another form of buy-to-let property that you can invest in is student properties. As the name suggests, you buy a property that will then be transformed to allow multiple students to live together. Each with its room and space to sleep.
It is important to remember that if you are planning to purchase a student rental property, these properties will need to be in areas whereby students need to live, such as close to the University or in the wider city area.
If you do decide to buy a student rental property, some of the benefits that you can expect to see are:
High demand due to changing students each year
Lower property prices for the type of properties that you need
High rental income
A hands-off approach is usually managed by property management instead.
HMOS
HMOs or houses or multiple occupancies are similar to student houses; however, rather than renting the property out to a group of students, the tenants are of mixed ages and backgrounds. The property will need enough space to have their bedroom and offer communal living rooms and kitchen spaces.
HMOs can be beneficial because they:
Can offer a higher rental amount as multiple people are paying for their own space
Properties that match the need of an HMO can be cheaper to buy (and may even come up at property auctions if you attend them)
There are plenty of choices regarding who you will rent to; you are not limiting yourself to just students or just those who want a house to themselves.
Buy to sell
Only some people who want to start in property investment will want to buy a property that is then let out. This means that choosing a buy-to-sell property could be a better option for them.
The idea of buy to sell is that you buy a property that will often require some renovation work to be carried out on it, and then, once the work has been completed, you sell the property at an increased price.
There are lots of reasons why people may choose a buy-to-sell property investment. These include:
You can buy a lower-priced property and maximise your return once it is worked on
You can gain experience in the property investment market and how it may work.
The return is short-term you will get the money once the property is sold rather than over the years as you would with a rental property.
There is no long-term tie in
These are just some of the options for property investment and real estate. The best thing to do is to take your time, think about what will be best for you and then try and find a property that will work for you and for the type of investment you are looking to make.