There is one question that every property investor wishes they knew the answer to: which type of property is going to bring me the biggest possible returns? Whether you are looking to buy to rent or are buying a property to sell of at a higher value, there will certainly be different answers for you. However, there are a few types of property that will bring you a good return whether you are buying to let or just to sell on. Here are the best types of property for your investment.
HMOs (Houses in Multiple Occupation)
HMOs are large houses with three or more bedrooms that are suitable for use by different occupants. The rooms are then rented out to individual tenants who will share the bathroom, kitchen, and living spaces. As you will be renting out each individual room, you will be able to get more rent than if you had simply rent out the property to one single tenant. Even though you might think that people might not be prepared to spend a lot of rent on just a single room in a house share, you will be thoroughly surprised. As sharing their home cuts down on the usual bills, most people are willing to pay a relatively above-average price for a room in a well-located HMO.
HMOs are often used as student accommodation, but there are also some other types of property that are used by students that can also provide you with a healthy return. For example, you might just want to buy some flats or apartments to rent out to single students on their own. Despite the overall property market slowing down considerably over the past few years, the student rental market is still proving to be very strong and profitable for investors. After all, students will always need to find accommodation!
Another sector of the property market that is doing really well at the minute is new builds. This is an especially great area of property to move into if you are expecting to become a landlord for the long term rather than a short period of time. As new build homes are very efficient and modern, you can be sure that their quality is going to stand up for quite some time – so you won’t need to worry about excessive maintenance or renovations for the first few years or so. Plus, the property will be ready to rent out straight away; you won’t have to spend a few months improving it, like you would with a period property.
Property With A Purpose
Not interested in becoming a landlord and renting out a property? Then you should look into buying properties with a purpose so that you can quickly sell them on. There are various types of property that fall into this class. For instance, you might want to buy a business to sell on, such as a restaurant, shop, or even a ranch.It doesn’t matter if you don’t have any experience in the particular property you buy as there are lots of nice real estate agents that can help you sell them on at the best possible price. Ranch Sellers are specialists when it comes to farms and ranches and will be able to advise you on how to prepare your ranch for sale, for instance. If you can buy a property with both a business and residential accommodation attached, even better, as these can sell for some quite high prices.
Multi-Unit Apartment Blocks
If you have never invested in property before, you are probably debating where the best place to start is. And the answer to that question is fairly simple – multi-unit apartment blocks! To invest in this type of real estate, you simply buy a block of apartments and then rent them all out to tenants. Alternatively, you could sell them individually. If you do decide to rent, you will find that renting apartments in the same block is a lot more easier and convenient than trying to look after rental apartments in different buildings! This is a very traditional way of investing in property and still one of the most lucrative options. Not only that, though, but it is also a lot less risky than some other property investments. That’s because if one of the apartments is left empty for a few months, it won’t matter so much as you will have cash from the others coming in. If you only had one apartment, you would struggle with cash flow if it were left empty for a few months at a time.
Fix ‘n’ Flips
Do you like the idea of taking on a big project? If so, you might want to roll up your sleeves and get to work on a fix ‘n’ flip! When you fix ‘n’ flip, you buy a property that is run down and needs quite a bit of work doing to it. Usually, it is a period property that simply needs to be modernized. Once you have carried out all this necessary work and the property is up to scratch, you can then rent it to a tenant or sell it on at a profit. Many people who have experience working in the building and construction industry go into these kinds of projects if they fancy becoming self-employed as it is a great way to make a steady income. Just remember that you need to have plenty of cash in the bank if you want to make a success out of it!
If you aren’t too sure about becoming a landlord, there is one easy way you could test the waters – simply rent out a spare room or entire apartment on a short term basis on Airbnb. While you won’t be able to make a regular income from Airbnb rentals, it is a good way of giving your savings a boost so that you are financially prepared if you do decide to take the plunge into the rental market.
Which type of property will you go with?
This is a collaborated post.