2016 is a good time to be a property investor. House prices are rising, interest rates are low, and the economy is buoyant. It all means that the market can look forward to some good days ahead. But actually making it happen is more difficult.
We’ve all been there at dinner parties when guests have been proudly telling each other how much money they made by flipping flats in London. Sure, it’s annoying. But there’s no doubting the fact that they made a lot of money doing it. Well, if you can’t beat them, join them. Here’re some foolproof ways to become a property tycoon.
Keep An Eye On What Upmarket Stores Are Doing
This might seem like quite strange advice. After all, why would it matter where posh stores locate? Well, if you think about it, it matters a lot. Big store chains don’t bother just setting up shop in any old location. They want to know whether they’ll actually find a market for their particular product where they locate. And, in so doing, they spend a lot of time and money on doing research. Posh, upmarket stores, tend to locate in places that are themselves, up-and-coming. And that gives you a good proxy for whether the price will rise.
Budget stores do this too, of course. But they’re not often located in areas where wealth is rising. In fact, the very opposite might be true. So next time you’re on the lookout for a property, scout around the local area. Is there a posh shop setting up nearby?
Take Advantage Of Low Rates
Many people worry about using property investment finance to invest in or develop their own property. But the truth is that there has never been a better time to do so. With finance, you could start with an initial lump sum of £200,000, and with some intelligent investing, turn that into £1 million. How? One way of doing it would be to buy up as many properties as you can. Let’s say you chose to buy up eight properties, with a market value of £100,000. For each of those properties, you pay a deposit of £25,000, consuming your entire budget. If you invest wisely, each of those houses could be worth £200,000 a decade from now. With interest rates so low, interest payments won’t eat into your equity. And so you could walk away with a very large sum of money indeed. Don’t forget; you can use some of the money that you make initially to invest in other projects, increasing your return.
Unfashionable Suburbs Are Great For Returns
You may have noticed that investors tend to follow the crowd. We see it all over the place in business, and in the housing market too. While following everybody else can be a good tactic some of the time, it’s not always the best. Take buying-to-let in unfashionable suburbs. Sure, these aren’t as popular with investors. But in cities like London that are short on housing, they’re easy to fill. Some landlords are even making a rental return of more than 5 percent. You’d find it hard to do the same in trendy areas of central London.
