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18/10/2013

Blog: Top 3 property investment strategies to consider

Investors

buying a new house shopping trolley

If you are considering investing in real estate, you may be interested to know there are a few different strategies to look at depending on how quickly you want to see a return on your investment.

Consider these three common approaches:

Buy, renovate and sell

The aim of this strategy is to buy a cheap house, fix it up and "flip" it for a quick profit. While this can be a successful strategy, it is not for everyone and there are some pitfalls to be aware of if you choose it.

People who choose this route need to be able to stick to a budget. It is worth doing your homework to see what similarly renovated houses are selling for in the area. Work out how much you are willing to spend on the house and on renovations to make a profit when you sell.

This type of investment needs to be approached with a business head rather than an emotional frame of mind. You want to consider the bottom line when choosing fixtures and home features rather than your own personal tastes.

Buy and hold

With this approach, you purchase a property and hold onto it in the long term or for at least two property cycles – so around 15 years.

The benefit of this strategy is that you will receive rent over that period, giving you a steady income stream on top of the capital growth in the property's value.

It also provides equity to borrow against, meaning you can add to your housing portfolio more quickly.

Buy, renovate and hold

This strategy allows you to buy a cheaper house, renovate it and then benefit from a higher rental return, because you can charge tenants more to live in a renovated house.

Before you jump into property investing, it is worth considering how quickly you want to see a return on your investment and the level of work you are prepared to put into your investment.

Book a FREE appointment with a professional mortgage broker now!

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