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Property investment strategies for the UK market - what are my options?

17th December 2018 Print

Property investment covers a wide range of options and the more you know about the different opportunities available to you, the better-informed you will be when you make your investment decisions. 

This is particularly important at the current time, when successful property investment demands a professional approach, with appropriate regard to timeless fundamentals such as the importance of solid numbers and the value of diversification. With that in mind, here are four property-investment areas you may have overlooked.

Care homes

Students have long played an important role in the buy-to-let market, but there is growing demand from those at the other end of the age spectrum and demographics suggest that this demand is set to continue to grow long into the future. 

From an investment perspective, the great advantage of care homes is that even though, to all practical intents and purposes, they are residential buildings, legally they are classed as commercial property and thus operate to a slightly different set of rules.

Commercial to residential conversion

Speaking of commercial property, commercial to residential conversions also offer good potential returns for property investors. As businesses have learned to work “smarter not harder”, their property needs have changed and as a result there are a number of (technically) commercial buildings, which are now lying empty, some of which are practically begging to be converted into residential accommodation. 

This area of buy-to-let property investment is not to be taken lightly and some investors might find it best to invest in them indirectly, for example by buying shares in/bonds from a property development company, however, it is fair to say that local authorities are becoming more amenable to these types of conversions as they seek to satisfy the demands for residential accommodation.

Houses with multiple occupants (HMOs)

If you have been thinking that there’s nothing but doom and gloom surrounding HMOs, then think again. It’s true that they’re now subject to more regulation than they used to be, but while this may be irksome, it isn’t likely to be a problem to the majority of landlords. In fact, it may even be helpful to them if it does succeed in driving rogues out of the market. In any case, HMOs are often hugely popular with younger adults, who want a place of their own, usually in a city, without the hassle of finding roommates (and replacing them when they move on). HMOs are therefore likely to be a good student property investment option for a long time to come.

Less-desirable tenants

Successful property investors tend to learn very quickly that tenant selection is important, which is true, the key point to note, however, is that tenant selection needs to be applied on an individual basis rather than using broad-brush criteria. 

In other words, in and of itself, taking on a young-adult professional does not guarantee timely payments and a responsible attitude towards your home any more than taking on a tenant on benefits guarantees late payments and a destroyed property. Being prepared to take on tenants with benefits and/or those with pets, applying appropriate risk-management strategies, could tap into even more demand without compromising either their cash flow or their property.

For more information on property investment in the UK, please contact Hopwood House