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YOUR TRUSTED PROPERTY INVESTMENT PARTNER

Risks in Property Investment Strategies.

Karen N.
Mar 24, 2023
1 min read

Updated: Jan 29, 2024

Property Investment Strategies guide + RISK LEVELS CHART INVESTING IN PROPERTY? It can be a smart way to grow your wealth, but it can also be overwhelming, especially for beginners. There are many different investment strategies you can pursue, and it can be hard to know which ones are right for you. In this infographic, we'll explore some of the most beginner-friendly property investment strategies, along with tips on how to get started. BTL: one of the UK's most popular property investment strategies. Social Housing: a rewarding way to make a positive social impact while generating a return. Serviced Accommodation: renting out a property on a short-term basis. HMO': multiple tenants who share common areas such as kitchens and bathrooms. WHAT RISKS DO THEY COME WITH? Each investment strategy has its own unique advantages and challenges. The key is to choose a strategy that aligns with your goals, risk tolerance, and resources. 5M is the number of households privately rented in England, which keeps increasing. Most of them are by people between the ages of 25 to 34, representing around 35% of the demand. BTL One of the main benefits of buy-to-let is that it can provide a relatively stable and predictable income stream. It's essential to do your due diligence when selecting a property, as not all properties make suitable buy-to-let investments. You'll want to choose a property in a desirable location with strong rental demand and good potential for capital appreciation. Tip: Getting the right professional opinion can be crucial to avoid risks and making a strong investment during this process. Social Housing involves buying properties for tenants who are in need of affordable housing, such as those on low incomes or with disabilities. One of the benefits of investing in social housing is that it can offer a more stable income stream than traditional buy-to-let. This is because the rent is typically paid by the government or a local authority rather than individual tenants. However, social housing has some drawbacks, such as the potential for changes in government policy and regulations. Furthermore, lending on these types of properties can be more difficult. Tip: Choosing a professional who already works with SH will make the paperwork and application forms a stress-free process, and they can offer you the best recommendations for the refurb process so you can have the best return possible. Serviced Accommodation involves renting out a property on a short-term basis, typically for a few nights or weeks at a time. This can be done through platforms such as Airbnb or Booking.com and can be a lucrative investment strategy, as it can generate higher rental yields than traditional buy-to-let. There are some downsides, as it can require more money on the refurbishment and furnishing process and more management and maintenance than BTL, as you'll need to clean and prepare the property between guests. Additionally, there may be legal and regulatory requirements to consider, such as obtaining the appropriate permits and licenses. Tip: SA has higher maintenance levels, including booking, guest management, bills and cleaning. Having a team that can take care of it for you can turn it into a lucrative and low-maintenance strategy for you as an investor. HMOs, or houses in multiple occupations, are properties that are let out to multiple tenants who share common areas such as kitchens and bathrooms and can be a good investment strategy for those looking to generate higher rental yields, as the rent from multiple tenants can add up quickly. Investing in HMOs can bring challenges as there are more legal and regulatory requirements, such as fire safety regulations and licensing requirements. Additionally, managing multiple tenants can be more time-consuming and complex than BTL. Tip: HMO properties can be more expensive to complete and sometimes take longer to refurbish. Planning the space and safety requirements need to be considered too, but with a good team, you will have all the details covered, and it can become a good house in multiple occupations with high returns. Next Infographic: the 4 ways to make money from a property investment

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