Buying Rental Property How to buy a property in an opportunity zone
When you hear the term opportunity zone, more often than not this relates to the US property market. However, here in the UK, the idea of an opportunity zone (and buying a property in one) can mean largely the same thing.
In the US there are some incentives that they have set out to encourage property investors to buy in these opportunity zones, these do not apply in the UK. However, despite this, it is still a sound investment to make.
Let’s take a look a little closer at what an opportunity zone is, why they are worth buying in and how to go about buying one.
What is an opportunity zone?
The idea of an opportunity zone is that it is a part of the UK that is seen to be somewhat in economic distress. This means that there is room for the economy to grow and also for jobs to grow too.
There are a variety of ways that this can happen, but for property investors, it means buying properties in the area and then renovating them. This will not only be a good investment for them but can also take steps to make the area much more appealing to live in.
Why buy in an opportunity zone?
There are several reasons why it is worthwhile investing in a property in an opportunity zone.
The main reason has to be that the initial purchase price of the property is going to be lower than it would be for similar properties in other areas. This will help you to get more property for the money that you have to invest.
Next, you should see a greater rate of increase in property prices in this area than you may elsewhere. This is because it is on the rise. The more landlords and property investors who buy a property in the area, then the more the area is going to grow. This can only be good news for those who have invested.
How do I find an opportunity zone?
One of the main things that you have to remember when it comes to these types of property investments, is that you need to take the time to research exactly where it is that you are buying.
You are going to want to find an area that is seeing a real lack of economic growth at present, but that has the room and possibility of being able to do this in the future. You want an area that has all the infrastructure that it needs to allow for this growth. This could be the right facilities, such as schools and also a sense of community there too.
That way, you know that when the time comes, there is a greater chance that it will be able to provide you with a return on the investment that you have paid out for.
How do I buy there?
Buying in an investment zone in the UK is much the same as buying in any other zone. You need to make sure that you have the money to allow you to buy the property. Either yourself or by arranging for a lender to provide you with the money.
You also need to make sure that you are aware of any of the work that is going to need to be carried out and what this may mean for you in the way of a timescale, as well as money.
You also want to take the time to research the area, perhaps visiting it a few times if it is not somewhere that you live locally. Find out more about what is there and the types of people that your prospective tenants could be calling neighbours.
Once you have all of this in place, you will be ready to enjoy your hard-earned returns and have a great start (or continuation) of your property portfolio.