Are you a beginner property investor but unsure about which property investment strategy to take?
At Touchstone Education our team of trainers and mentors have helped tens of thousands of students with them now owning an accumulated property portfolio worth over £1 billion.
How do you get started in property investment and what are the best investment strategies for newcomers? This blog post explains.
What is property investing?
Property investment involves the purchase, ownership and management of physical property with the aim of generating returns from rental income or capital appreciation.
It is a popular form of investment used to diversify portfolios as it enables investors to benefit from both capital gains when they eventually sell the property, as well as regular rental income.
Property investments offer a range of advantages, including the potential for long-term capital growth and the possibility of generating passive income.
However, property investment also carries some risks, such as large upfront costs and the potential volatility of rental income or house prices. As such, it is important to research and understand all aspects of property investment before taking the plunge.
What are the advantages of property investment?
The advantages to investing in property include:
Generating a passive income
For those in employment, property provides an opportunity to obtain additional passive income. Due to appreciation, the property should increase in value, whilst the homeowner sleeps.
As the homeowner starts to generate income, their wealth increases and the individual has the potential to secure their long-term future and success
Saving for retirement
A huge proportion of the population live their lives from paycheck to paycheck
Predicted earnings from people without a secondary income suggests that current generations will struggle to live off savings in retirement
According to Business Matters Magazine, “real estate properties remain to be one of the best ways for you to build wealth over time.”
High appreciation
Appreciation refers to the increase in value of a particular asset over a specific period.
If the owner is looking at selling the property in the long-term it is highly likely that it will increase in value by a significant margin by the time it is sold. This is due to a number of factors, including population growth exceeding housing supply.
Tax deductions
For investors looking towards better savings from the distant future, then investing in property is the way to go.
As well as the increase in value over time, it also provides certain tax deductions that are made available for those who own long-term assets or long-term investment options.
These tax deductions include:
- Rental expenses and other expense deductions
- Mortgages expense
These benefits multiply with success.
What are the top 10 property investment strategies for beginners?
1. Deal Packaging
Deal packaging is a professional business that introduces investors to property deals.
The individual will provide comprehensive information on a property include details on the area, price comparisons, management of properties and more.
It means that the individual can command a fee on the deals that they have found for the potential investor.
This is a handy strategy if you are time rich and cash poor, in comparison with other property strategies – but is suitable for everyone. Importantly, nobody is going to buy every property investment opportunity that they find because either the geography or the type of property might not be right for them and their strategy.
What is the perfect course for you?
This course will teach you:
- How to understand the types of property investments
- How to research
- How to network and find the best deals
- How to find the best deals
- How to find motivated sellers
- Assessing market value
- How to grasp current trends
- Comparing the competition
- How to add value
- What complexities are likely to occur and how to deal with them
- How to obtain certificates and licences
- And much more
2. Rent To Rent
Rent to Rent is where an individual or company takes an interest in a property for a period of time from a landlord and guarantees to pay a fixed rent to the landlord. The landlord gives consent to the third party, ‘the Renter’ to then rent the property to another tenant. The benefits of this arrangement mean that the landlord is guaranteed of rental income regardless of whether there are tenants in the property or whether it is empty. The renter generally would take care of any damage to the property and return the property to the landlord in the same condition they found it, ensuring peace of mind.
What is the perfect course for you?
This course will teach you:
- How to make money from property without buying it
- The types of rent to rent models
- The rules on mortgages and deposits
- What is the rent to rent agreement
- How to deal with maintenance issues
- How to deal with insurance
- How to avoid illegal sub-letting
- How to make a property more lettable
3. Joint Venture Finance
Joint Venture Finance is for everybody that wishes to successfully invest in property using none of their own money. The single thing that most people think they are short of it actually in limited supply if you now how to attract it to you: investment cash.
Using this strategy allows you to have a huge property portfolio with very little outgoings and a few simple steps.
What is the perfect course for you?
This course will teach you:
- What is a Special Purpose Vehicle (SPV)
- How to attract investor shares
- Benefits for all parties involved
- How easy it is to get involved in Joint Venture
- What the eligibility criteria is
- How to prepare profitability forecasts
- Due diligence on demand in an area
- Understanding the exit strategy
4. Buy To Let Investments / Lease Option Income
Buy to Let is one of the most common forms of property investment, where an individual or company purchases a property with the intention of letting it out to tenants.
Due to the high costs of deposits and prices as an entry barrier, many young people are choosing to rent opposed to buying property outright, presenting opportunities for investors.
Lease option income means that you can simply and quickly build your portfolio without using deposits and mortgages.
What is the perfect course for you?
This course will teach you:
- How to get started in property investment whilst investing very little cash
- How to make money every month
- How to buy the property if the value goes up and have instant equity
- The importance of legal representation
- How to negotiate effective agreements
- How to use the strategy for strong cash flow
- How to find tenant buyers
5. Commercial Property Portfolio
Commercial property is lucrative business with high income yields. As business can generate significantly more income than the average individual this generally means they can contribute a higher cost. A business tenant also provides stability and consistency of income, and like with residential property the value of the asset is only likely to increase long-term.
What is the perfect course for you?
This course will teach you:
- Up-to-date insight on what is working in the world of commercial property
- The strategies to buy outstanding investment properties with a view to replacing salary within 12 months
- How to achieve big deals ‘hands free’
- How to build a commercial portfolio from scratch
- How to retire early and with more with commercial property
6. Commercial Conversion
Converting a commercial property into a residential can yield substantial profits on investment and create a good source of long-term wealth. Buying a property in a prime location means that you can create an often quirky, highly sought after location or even ‘famous’ property within a local area and create demand with higher prices to boot. Using the property as a residential investment also has tax benefits.
What is the perfect course for you?
This course will teach you:
- How to analyse a deal
- How to create a checklist for success
- How to maximise the value of your commercial conversions
7. Rent To Buy
Rent to Buy is designed to ease the transition from renting to buying a home. Utilising this property strategy means that homes can be rented for 20% below market value for a number of years.
What is the perfect course for you?
This course will teach you:
- How rent-to-buy in single stroke removes all the structural issues with the housing market, including voids, maintenance and arrears
- How to identify the right sort of properties
- How to identify the right sort of tenants
- How properties can be financed
- How to calculate the initial investment, rent price, the top up and the sale price to the tenant buyer
8. Serviced Apartments
The serviced accommodation property strategy has multiple strands to it.
It is a fast growing sector which provides tangible benefits to both guests and landlords. It means that the landlord provides a service to guests who are staying in the accommodation, from room service to amenities.
A serviced apartment is a furnished apartment which provides amenities, housekeeping and other services for guests within the cost of rental. This can include laundry and cleaning services as well as access to gyms and other facilities. They also tend to feature a full kitchen, sleeping area and internet access.
9. Holiday Lets
Holiday lets are another type of serviced accommodation.
A holiday let can learn a landlord around 30% more than a traditional buy-to-let. It allows landlords to take advantage of the staycation boom which started in the pandemic and has followed into the cost of living crisis.
To qualify as a furnished holiday let for tax purposes, the property must be available to let for at least 210 days a year and be let commercially to the public for at least 105 days a year.
What is the perfect course for you?
- How to take advantage of serviced accommodation
- How to accelerate the process of obtaining deals
- How to get agents on board
- How to fund deals
- How to be compliant
- How to source and market properties
- How to maximise profits
10. Houses of Multiple Occupation
Houses of Multiple Occupation (HMO) can include many different types of accommodation including hostels, buildings containing shared facilities, shared houses and lodgings.
To be classified as a HMO, properties must have four common features:
- Occupants are not forming a single household
- Occupants must be using the property as their only or main residence
- The accommodation must be used solely for residential purposes
- One of the occupants must be paying rent
What is the perfect course for you?
To make the first steps on your property journey, claim your free Wealth Through Property e-book.
Wealth Through Property is the UK’s leading 2-day property investment course. It is designed to provide you with specialist knowledge of proven investor strategies. Learn how to get started and build your property portfolio and gain real-world advice.
To find out more information about the property investment courses we offer call us on 01302 897131 or email office@touchstoneeducation.co.uk.
