The interest on savings is rather poor and the stock market still a risky venture. So, you might be considering other routes of investment and monetary gain. One possibility is to invest in real estate. By doing this, you’ll have an excellent chance of doubling your investment. But, there are two routes to investing in property and you’ll have to choose which one is right for you. Both have different types of responsibilities and challenges.
Buying To Let A Property
If you buy to let a property, you will be buying a block of flats or several apartments to rent out. You may also choose to buy houses to rent to tenants. The biggest issue of buying to let is that you will be taking on all the responsibilities of a landlord. That means that you will have to make sure that the property you buy is safe and secure. You will also need to fix any damage to the property or sort out expensive repairs. That’s why if you’re buying to let we recommend you have emergency funds that you can use.
As well as this, you will have to know who your target tenants are. You may want to think about letting to students. There is always a good supply of students looking for accommodation through the year. As well as this, you will be able to find students who will accept the bare minimum. This makes the property that you purchase cheaper to renovate. You can save on costs by buying the same furniture for every property that you own.
When paying for a property, you will have to get a loan. If you are buying multiple properties for letting, we suggest that you look into portfolio loans. These loans are backed by the bank and are therefore more secure than hard cash loans. It is also one of the best ways to finance multiple places thereby increasing your annual income. However, portfolio loans are harder to obtain. This is certainly a disadvantage of buying to let.
Property to flipping is somewhat different to buying to let. The biggest difference is that you won’t be taking on the responsibilities of the landlord. Instead, you will buy the property and sell it on as quickly as possible. For this reason, you might want to take out a hard cash loan to pay for this investment. These have high-interest rates but are easier to obtain. As long as you are able to sell the property on quickly, you shouldn’t have an issue.
When property flipping you will need to renovate the property. It’s best not to take on more than you can handle. You should buy one property, flip it as quickly as possible and move on to another. By flipping multiple properties at a time, you can easily get in over your head and lose your investment. As well as this, you should be aware skilled property flippers know how to increase the perceived value without spending a lot of money. You can find tips on how to do this online.
Either one of these routes can lead to big profits as a result. But you should be aware of the risks that come attached to both.