Two of the key focuses of my blog are Financial Literacy/Money and Business/Entrepreneurship. Investing in real estate can be very lucrative if you know what you’re doing. No matter which part of it you choose to get into, much of succeeding in the real estate investment game involves finding the right property. The following contributed post is entitled, How To Find Your Property Investment Niche.
* * *
If you are considering getting into the property market, you may want to explore the possibility of finding a niche area in which to grow your investment portfolio.
While many people will buy based on the outlay, and the level of work needed to a property before renting or selling-on; so many investors don’t focus their attention on specific areas of investment. Being a specialized investor will allow you to develop significant experience within your sector. Once you have gained that, you can apply your knowledge into getting the best investments.
Investing In Apartments
Often, private investors overlook buying apartments. With an ever-growing population, particularly in concentrated urban areas, apartment living is trendy. A small space within a popular area with excellent links to business hubs, as well as social amenities offers the opportunity for a premium price tag when it comes to renting or selling on.
Take, for example, at these Zetland apartments. Zetland is an area of Sydney that is currently undergoing gentrification and urban renewal. Businesses will begin to flock to the city once developments are completed. Buying into an area that looks set for a significant culture shift now, would pay dividends when the demand for real estate in the neighborhood hits its peak in the coming years.
HMOs
Houses of multiple occupancies, or HMO for short, offer a high return on investment. By splitting the property into smaller flats or apartments, you can have various rental streams. You will have more tenants to manage. However, you can always hire a letting agency to deal with this process for you.
Given a substantial rise in HMO properties, and the prevailing of landlord exploitation of tenants, there are quite a few regulations surrounding HMOs. It is recommended that you research the specific rules in your area, as you may be required to have a license and undergo regular inspections.
You may want to consider renting this type of property out furnished. And, often, due to the nature of the property it is common to include any utility bills within the rental cost.
Generally speaking, the yield on a house of multiple occupancies is significantly higher than a single-occupancy property of similar square footage.
Student Lets
Students offer an excellent opportunity to gain maximum rental potential from a property. Again, this is similar to an HMO in that you may want to divide up a property into smaller units or rent out on a room-by-room basis. Student rentals are generally in very high demand, and you are almost guaranteed to find tenants. Your income will be dependant on term times, so consider using the summer holidays for any refurbishment works that need doing.
Holiday Lets
Buying to rent out in a popular holiday area can provide an excellent yield during peak seasons. As you will generally be letting on a nightly, weekly, or fortnightly basis, the price can be much higher than if you were to rent out a property permanently.
You will need to consider any downtime, such as periods where there are less likely to be visitors to the area such as during the winter months.
You will also need to market the property continually, and also deal with housekeeping whenever visitors leave.
