Although there is much uncertainty in London financial markets (see here), property investment is still seeing positive returns as investors look to more stable forms of financial return. However, property speculation has always been a difficult market to gauge accurately, and after decades of relatively steady increases in the London property market, the return to fluctuating house prices has seen some investors shying away from this form of investment.
London Property Investment Companies
Yet, property speculation and property investment should be thought of as two separate investment forms. In property speculation, the property is bought with the specific idea of selling it again for a profit, often with only minor capital investment, while in property investment, the property is generally purchased with a longer-term view of holding it and using the property to generate income through rents.
How To Get Involved In The Property Market?
Although there are those that accidentally fall into property investment by inheriting a home when a relative dies, or from having two homes when a couple comes together, for the majority of people looking at investing in a property, that they can earn a stable income from, they will be buying outright. There are several options, with different risks and returns. You may prefer to look at open homes in your local area, search through real estate advertisements for corporate or industrial properties, or get the advice and expertise of a London property investment company.
Using A Property Investment Company:
There are generally two types of companies set up for property investment. Through one system the company purchases or builds the property then calls for investors in what is effectively a shareholder scheme. The other type is closer to a real estate agent, providing specialist knowledge of the residential and commercial rental market and has a range of suitable properties for a prospective investor. Like any form of investment, you will need to do your homework as to which investment style will suit your needs, your risk level, and the amount of funding you have at your disposal. However, as a general rule, it is a good idea to ensure that you have physically visited the property that you will be investing in, even if only as a shareholder. You will want to ensure that the property meets a standard that will allow it to be rented out and turn a profit. If you will be required to spend a large sum in renovations or repairs initially you should take this into consideration when purchasing.
When buying an investment property, you should have even more care and research than you would for buying your own home. An investment property in an area that is about to be redeveloped or that needs substantial upgrades to be habitable may be a good investment if you have the skills and knowledge, however if you are looking at costly engineering surveys and building work on top of your investment price you may need to rethink how long you were wanting to hold the investment property for. Investing in property isn’t generally thought of as a short term high gain investment, despite recent trends in some property markets. If you feel that the income earned over a period of time is great enough to justify a high expenditure initially in order to increase that income stream over time, you may still be looking at an excellent investment.
Trends and Market Research:
One of the reasons to talk with an investment property company is that they generally have a better knowledge of the trends in the area you are looking at. ft.com Often market research is released to the public that covers are the broad area. Unfortunately, as an investor knowing what the general trend for real estate in the greater London area is as much use as knowing the housing market trends for the entire United Kingdom. What is happening in one borough can be very different from what is happening in the area just next door. Sometimes even just streets apart can see dramatically different trends. This may be due to views, radius to school zones, proximity to public transport, or a host of other reasons that your investment specialist should be able to help you decipher.
Are Rentals A Good Investment?
The population is not decreasing, particularly not in most cities around the world. Many of these cities are experiences major shortages in rental properties, including London. A number of factors are causing this including the birth rate, people coming into the city for education, and immigration. What this means for investors is that in the foreseeable future the income that can be derived from investment property looks to be quite stable. However, you should have enough funding behind you to allow for a drop in the market, a period without tenets, and a budget to allow for repairs and maintenance.