Ever wondered what is property investing?
Property investing is the business of buying a property with the intention of selling on for profit (flipping) or keeping it to rent out (buy to let).
Buy To Let
The most popular investment type is the single let buy to let. These can cash flow around £250-£350 PCM in the North East where we are based. If you build a portfolio of these types of investments, it will not be long before you can start thinking about quitting your day job. We are currently building buy to let portfolio.
You can build up your cash pot quickly by using buy-to-sell strategies (flipping). Look for properties where you have the potential to add value. A run-down property could be purchased and renovated to a high standard. You can build an extension or reconfigure the layout to be able to fit an additional bedroom.
HMO Strategy
A more advanced strategy is HMOs (Houses in multiple occupation).
An HMO is a property that has:
- at least three tenants live there, forming more than one household
- you share toilet, bathroom, or kitchen facilities with other tenants
A Household is classed as a single person or members of the same family who live together.
A family includes people who are:
- married or living together – including people in same-sex relationships
- relatives or half-relatives, for example grandparents, aunts, uncles, siblings
- stepparents and stepchildren.
Compared to other types of investments, these ones have a much higher cash flow. However, you also have to pay for the utilities, broadband, TV subscriptions, insurance, and others. Because of the higher tenant turnover and the possibility of disputes, managing an HMO takes much more effort.
Serviced Accommodation
One investment strategy that is becoming more popular is Serviced accommodation. This is where you rent out your single let on a nightly basis via sites like Booking.com or Airbnb. Just like an HMO you as the property owner will have to cover the cost of utilities, broadband, TV subscriptions, and insurances. You will also have furnished the property fully to a high standard. You will also have to employ cleaners after every booking to ensure you receive helpful reviews. Which are vital for future bookings.
The good news is that there is a strategy for all investors, regardless of their level of experience.
Thanks for the article!