Alternative investment options Property
With some buy-to-let properties only returning an income yield equivalent to a savings account and many renovation properties being sold for more than they're worth restored, it’s worth considering different ways of investing in property.
Questions to ask yourself
- Whatever type of property you invest in, consider how long you can invest your money for, is it five, ten or more years?
- What return do you want - an income stream or capital growth?
- Do you want hands-on involvement, potential risks and hassle included, or would you prefer to invest with other people and spread your risk?
Never invest in any property deal unless you're clear on how and who you will sell it to and all the costs you will incur.
Renting out a room
One great way of making money out of property is if you have a home already and can rent out a room.
Renting a room can secure you up to £4,250 extra income each year - helping to fund an additional mortgage of around £50,000 per year!
Building for profit
If it’s more hands-on investment you're looking for, consider building for profit such as finding a property with land that allows you to extend or even build another property. If you're looking for long-term income, check out what commercial opportunities are available and find out about property syndicates that you can invest in to help spread the investment risk. Check your local paper’s business pages or with your local auctioneer.
It might be that you prefer a hassle-free property investment where you hand over your cash to an expert. If so, talk to an independent financial advisor about property funds that can spread your investment across many different property projects.
Invest in a hotel or student accommodation
For those that live and work in different areas, or who want to spread their investment risk, you could consider investing in a hotel apartment or new student accommodation that's being built – it should be of a high standard, give guaranteed rental returns and be well maintained.
Whichever way you intend to invest in property, make sure you understand the risks involved, and that it’s the right investment for you. It might be good to speak to a financial adviser. Also see the Property Investor's Handbook for further advice and information.
You should also do independent checks on any deals you're offered – see the Royal Institute of Chartered Surveyors.
Don't forget – don't buy unless you know you can sell at a profit!