Why invest in property: Is it worth it?

Forth Action Invest on December 12, 2022

0

Why invest in property when the world is going through various issues? A global pandemic, several Prime Ministers, and a looming recession. The UK is experiencing odd times, where many things are uncertain.

But how is the property market looking? While the short-term may be looking a little shaky, the property market is often seen as a reliable, consistent long-term investment strategy.

According to a recent forecast, real estate market rentals are expected to see an annual rental growth of three to four percent between 2023 and 2026.

And from 2022 to 2026, the cumulative rental growth is expected to reach 20.5 percent.

For those who purchase property in high-demand areas, this could provide a nice chunk of change monthly, with a great return if you sell when demand is high. But, as with any investment, it’s important you carefully analyse your situation and whether this is right for you.

*Please note this blog does not constitute investment advice. Conducting your own due diligence and being aware of risks before making any investment is key. Seeking independent financial advice may be appropriate.

Why invest in property: Is property a good investment during a recession?

When times are uncertain, there are some questions you should ask yourself before investing in your chosen product: Are you financially stable? Do you have a guaranteed income stream, or multiple, for the next few years? And do you have a safety net?

‘Buy low and sell high’ is one of the most famous lines when it comes to successful investment – across property, stocks, and other assets.

For those looking for that opportunity, UK house prices are expected to fall for the next two years before starting to rise again (according to the government’s official forecaster.

A drop of 9% is forecasted between now and autumn 2024.

Plus, UK renters are expected to outnumber homeowners by 2039, so the future looks bright for landlords.

After analysing your financial situation (with extra caution because of the recession), buying a great deal could be a good investment for the future.

Property via Forth Action Invest

Why invest in property: Going forward, is it worth investing in property or other assets?

We all know the last couple of years have been strange – to say the least. And 2022 is no different.

While the recession is throwing up various uncertainties, the phrase ‘as safe as houses’ has been rolling around for years.

This is due to house prices rising with inflation, which leads to rising rent prices too. 

In 1999, the average house price was £77,961. In May of 2022, that figure rose to £283,000. For those who bought a property in 1999, they’d be selling for a significant profit.

When investing in property, this is a tangible product. It’s something you can hold onto for as long as you like and something you can even pass down through generations.

How to prepare for successful property investment

Each investment strategy requires some form of planning before going in completely blind. 

But this will depend entirely on your style – are you looking to do everything yourself or looking for assistance throughout? Do you have a plan for when you’ll sell or how you’ll market your rental? All of these aspects play into property investing.

If you’re looking to free up your time while pocketing monthly rental fees, partnering with a property specialist like Forth Action Invest is a great way to be led by experts.

Here are some key steps you could consider…

Location, location, location

Choosing the right location is essential. 

High-demand cities, or commuter towns in close proximity, are great choices. Historically, London has been a favourite among many. But while the high prices suit luxury investors, other regions across the UK could outpace the city’s projections.

According to key research, the North West is set to see the highest regional price growth (at 28%) over the next five years (between 2021 and 2025.) 

The North East is next on the list with an overall increase of 24%, as is the East Midlands (24%) and West Midlands (24%.)

The South East is expected to see a 19% increase over the five years, with London coming in last at a 12% rise.

Photo by Joe Cleary on Unsplash

With the investments and rise in people moving North, it’s no surprise that the North West is paving the way over the next few years. 

Manchester was recently named one of the leading global hotspots for startups, investments are being pumped into the area and large companies are opening up in the area. 

For a detailed breakdown of the best places in Manchester for buy-to-let opportunities, read our full guide here.

Financing your investments

Often, people believe cash investments are the only way forward which provides a major hurdle for a large number of people. But this simply isn’t the case. 

There are other options beyond cash or getting a mortgage.

Equity: People have great value in their homes, yet this isn’t used to their advantage. 

Releasing equity in your current home is a handy way to raise capital for other investments. An independent broker should be able to help you find the best deal.

This is particularly useful for those who are adding to their portfolio.

Other investors: Are the people closest to you aware of your property investing goals? Leveraging your time and knowledge with other people’s funds can be a popular way to raise finance; they may prefer this over the current interest rates their banks are offering.

Vacant homes: In 2021, there were 288,539 empty homes in the UK, with the North West being one of the top areas with the most empty dwellings.

If you come across one of these empty buildings and it takes your fancy, find out who the homeowner is by submitting an enquiry via Inland Registry. They may be up for negotiation, which can be a great lower-cost property option.

Time is precious – securing a deal

Once you’re aware of the desired location and how you’ll afford the property, next comes finding the best deal for you.

This deal can be found in various ways – either by networking and building up a pool of contacts, by scouring the location with a keen eye, or by using property sourcing agents. 

If you’re opting for the DIY method, start reaching out to relevant investors in your area to network and search for relevant investing pages on social media. Not only can these provide interesting opportunities, but also useful nuggets of information.

Deciding on how you’ll find your property investment deal is entirely dependent on how hands-on you wish to be and how much time you can dedicate to the cause. 

If you’re looking to secure the best deal with professionals in the industry, working with experienced investment and development specialists is the main way to achieve this. 

Forth Action Invest, who are experts in the North West, can provide you with unrivalled opportunities. You’ll get exclusive access to properties that aren’t yet available to the public. This guarantees you a better deal than you’d find after searching public property sites.

And as specialists in the area, our wide network of contacts, housing associations and corporations often come to us with unique and exciting investment possibilities. 

Work with North West property experts 

If you’re ready to get the ball rolling with investing in property, you’ll be joining a welcoming community of people who are always happy to share their wisdom. 

It can seem quite daunting if you’re doing this alone, but it really needn’t be. Connect with the relevant people in your area, or lean on other investors for top tips and useful advice. 

Or, if you’re looking to partner with Forth Action Invest, we’ll have seasoned professionals walk you step-by-step through each process.

This could include our complete turnkey service which removes the stress of UK property investment as the work is done for you. You can sit back and relax while collecting your monthly paycheck. 

For more information on how you can secure a new stream of income each month (without the hefty workload) learn more about our ‘Guaranteed Rent Scheme’ and book a free consultation here.

*Please note this blog does not constitute investment advice. We recommend you conduct your own due diligence before making any investment, including seeking independent financial advice.