Brought to you by RW Invest:
Despite the trepidation in the country surrounding Brexit and its potential effects on the economy, the current housing market in the UK is still an exciting prospect for investors. In fact, property investment is set to stay strong regardless of the decision and subsequent result later this year: projected to grow to 12.6% by 2022.
To make sure you’re getting the most out of your investment, below are some modern property investment tips to help you keep your investment future-proofed.
Consider the Area You Want to Invest In
For first time investors, or those looking to expand their portfolios, thinking about the potential area that you want to invest in is crucial. Properties are often a long-term investment choice, so it’s best practice to look at an area set to improve in the future in order to maximize profits.
The two primary sources of income from property investment come from the property’s rental yields and capital growth (also referred to as capital appreciation):
- Rental yield refers to the amount of money that a property will generate per month from potential tenants living in it. These are typically calculated in NET yearly percentages, so if you purchased a property for £100,000, a 5% return would be £5,000.
- Capital growth refers to the increase in a property’s value over time. In some instances, taking the early bird approach and investing in a property before it’s completed will increase the value before the doors have even been opened to tenants. The trade off, of course, is that you won’t be able to receive monthly payments until it opens.
Again, both of these are set to increase in the UK, reaching a 12.6% improvement by 2022, but some areas are projected to be more prosperous than others. One key area to think about would be the northwest, which is set to have the highest growth in the country over the next few years at 16.5%.
For reference, the Greater London area will, unfortunately, stagger behind with a below-national-average 11.4% growth. This is still trending in the positive, but with a higher initial house price cost and lower capital appreciation, it’s a questionable choice for many to still go south. For the average price of one house in London, you could buy three in Liverpool or Manchester and still have plenty of money left over to visit on the tube.
Use the Technology Available to You
Forward-thinking proptech is an important and great way of not only making you more connected and involved with your potential investment but also more satisfied with the purchase. Permeating most businesses and companies nowadays, technology is most prevalent in property investment in the form of virtual reality, which goes hand in with the increasingly popular off-plan investment strategy (i.e., investing in a popular area in advance — before completion and without prior viewings).
When contemplating an investment in one of the burgeoning areas discussed above, it’s certainly a good idea to look at the potential property using virtual reality, particularly if the project is still in its infancy and you aren’t able to view the area. Property investment companies such as RW Invest offer VR viewings with their developing projects, allowing buyers to get a feel for the property they’re investing in and helping make their decision to invest a confident one.
Another huge benefit to VR is that it gives international investors and those not able to get to the property for a viewing the chance to get as authentic of an experience as possible. Considering the attention from Chinese investors, for example, has increased by 160% since the start of 2018, this is proving to be a technique that is increasingly trusted and relied upon.