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4 Ways To Invest In Property

Investing in property makes good business and financial sense as property generally increases in value over time. There are many ways to invest in property that don’t always require you to have a lot of disposable cash. This article aims to explore your options in property investment, ranging from the more traditional buy to let property developer, to alternatives such as peer to peer lending opportunities.

Buy a property to rent out

This sounds an easy concept, you purchase the property and let it out to the rental market. It is important to remember the costs associated with a buy to let property, firstly you will need a large deposit, then you will more than likely require a mortgage on the remainder. The costs of buying the property are considerable, when you factor in legal costs and then getting your property to the standard required for renting out. If you buy in an area where the rental market is buoyant you will be able to ask premium rental prices, in time this will provide a profit on your initial purchase, especially if house prices rise. There are always maintenance costs to factor in to your profit though, such as leaking roofs and broken boilers.

Renovate a property

There is profit to be made if you can purchase a property at below market value in order to renovate and either sell or rent out. Location is the main consideration and be aware of property prices in the area. If you embark on a renovation project you will need to hire in experts to do certain tasks. Companies such as  grab lorry hire have fully insured drivers and lorries to enable you to remove large amounts of waste and rubble.

Invest in property funds

Another way of investing in property is to buy shares in property funds. This is a collective investment from different investors. A fund manager will then invest the collected funds in order to get the best returns. Property funds normally deal with commercial properties and returns are gained from rent or interest from bridging loans. It is important to take expert advice before investing in property funds.

Peer to peer lending

Peer to peer lending is carried out on an online platform. It basically brings together two parties, one who lends the money and the other borrows. This is very similar to how banks and building societies work, but because the transaction is carried out between two parties and there is no third party involved, costs are kept low and returns are much more profitable. Peer to peer lending is useful for business start-ups and property investment.

With regards to investing in property, peer to peer lending enables your funds to be loaned to property investors in the form of a buy to let mortgage. The returns you recieve back are from interest paid by the investor.

There are many more aspects to peer to peer lending, its popularity has grown considerably over the last few years and it is possible to invest as little as £100. Always take expert financial advice from independent sources so as not to be drawn in by the promise of high interest rates.

There is also no guarantee on profit, so peer to peer lending has an element of risk.

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