How to form a Property Investment Strategy if you plan on buying investment property?

  1. Identify the outcome that you seek to achieve
  2. Define your limitations
  3. Discover your risk profile
  4. Question your beliefs
  5. Plan a course of action and set time frames
  6. Identify suitable partners

Identifying the outcome that you wish to achieve

Questions to ask when forming a property investment strategy:

  • Is it high income you seek?
  • How much time do you have to contribute to managing your properties?
  • Do you want to take on more debt and the risk of interest rate increases?
  • How important is building a property portfolio quickly?
  • Which areas have your identified that are of particular interest?
  • Are you comfortable to proceed?

How to invest in UK property

Investors have different reasons for investing. Some people may be looking for a high yield with very little input from from a management point of view. We call these sort of investments hands-off investments because they are fully managed and generate a high yield. The following investment properties fall within that strategy:

The type of investors that are drawn to hands-off investments are people that are time poor or have reached a certain stage where they do not want to have the hassle of managing a property, they just want to receive a steady income from their property investment.

At One Touch Property Investment we cater for all types of investors; a large portion of our investors are people who are reaching retirement age and seeking looking for reliable safe investments that can bolster their retirement income. Many of these investors had never invested in property before but were drawn to the high yields and simplicity of student property investments. Busy professionals and overseas investors also liked the hands off approach the sector offered.

Types of Property investment strategies

  • Buy-to-let strategy
  • High yield passive income investing
  • Development and refurbishment

Buy-to-let Strategy

The buy-to-let strategy is often favoured by those seeking to expand upon or build a property portfolio as quick as possible. The type of individuals that adopt this style usually have a long term approach and are willing to take on more risk and debt in order to grow their portfolio.

Gearing

Taking on more debt is often called gearing. The principle is to use more of the banks money than your own. That way, the investor can grow their portfolio quicker. For example, the typical buy-to-let mortgage is seventy-five per cent loan to value (75% LTV) which means that with a twenty-five per cent deposit the purchaser can make a buy-to-let investment. Loans are only available on ready built property and are not available for non-resident investors.

Built in equity

At One Touch Investment we source property that that can be purchased off-plan and ready-built properties that are often below market value (BMV).

The property sourcing team aim to create value by finding off-plan developments in high growth areas in which there is a supply shortfall relative to demand. If an investor purchases the property at today’s prices there is a good chance that the price will be higher upon completion.

High yield passive income investing

Albert Einstein said “Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.”

In this low interest rate environment, the search for high yield has intensified.

The typical bank savings rate is a meager 1.5% to 2.5% (June 2016). While the real cost of living is increasing at a faster rate than savings which means that the average saver is getting worse off as each month goes by.

Those savers that are nearing retirement age are being hit the hardest because they do not have much debt, they are not benefitting from the low rates of interest while their savings are quite simply not making enough to sustain themselves in retirement. This is a real concern.

Hands-off investments like student property and care home investing are ideal for the high yield property investment strategy because they provide high yield and a good level of capital protection.

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