Interest rates are on the rise. This is great for those frugal enough to have squirrelled away their hard earned cash in a savings account. However, for those individuals with a more aggressive investment strategy, a higher interest rate is not necessarily music to their ears. Investing in property has become a popular pastime in recent years with the mid-noughties property boom and acceleration in house prices prompting the would-be developer to dip their toe in the second home market. People began buying fixer-uppers, renovating them and then presenting them back to the open market, selling quickly and realising a handsome profit. While these fruitful days are long gone, there is still money to be made from property, namely from buy-to-let. Take a look at these ways in which you can ride out any housing market turbulence and ensure your burgeoning portfolio stays the course.
Choose The Right Location
You need to do your research to ensure that your purchasing in the right place. You don’t want to be falling into the trap of buying a plush property if it’s on an awful street. You want to be owning the worst house on the best street. If you pick it up at a rock-bottom price, you can then get it ready to let out quickly, and potential tenants will be knocking on your door because the house is situated in a lovely neighbourhood.
Market to A Specific Tenant
Don’t try to market your properties to everyone and anyone; you must be specific. Otherwise, you could end up with nobody wanting to rent your property as you don’t hit enough of anyone’s criteria. If you’re marketing to young professionals, they want a neutrally decorated pad, all mod cons with good transport links. Families, on the other hand, want a garden, a decent driveway and plenty of space.
Do The Maths
It doesn’t matter how lovely the little apartment that you have bought is or how amazing the views are, every property has its ceiling rental, and you need to make sure this is financially viable for you. You need to go for rental yield and think of your property portfolio as a long-term investment. Short term gains are not the aim of this particular investment game.
If you fancy trying your hand at something a little different or possibly more lucrative, why not invest in overseas property. You could find yourself letting out a holiday home on a weekly basis for a premium price. Your yearly rental yield will be much greater, leaving you with substantially more cash to reinvest elsewhere, either in more property or other investment options. You may need a managing agent to take care of the admin and foreign legislation, but it could still be worth a punt if you care for a mix of properties in your portfolio.
Investing in property shows no sign of becoming a weaker choice when considering the best options to realise growth. While economic times may not be as buoyant, you can still realise lucrative returns if you play the market astutely and keep long-term gains as your aim.