Here’s How To Make A Living Investing In Property

Over 5.34 million homes were sold in the US alone in 2019 – that’s excluding sales of almost seven-hundred thousand new-builds.

The Real estate is a multi-million-pound industry and is frequently considered one of the most trusted and reliable ways to make money.

It is wise to use a buy to let calculator to calculate a potential yield and assist with working out the best way to drive your portfolio and return on investment. But how do you get started making money in bricks and mortar? Here’s how to make a living investing in property.

Flipping A Property

If you’re looking to make money in property but don’t have a residence to make money from, flipping a property could be an excellent way to get started. Property flipping refers to buying a house at a lower price and selling it at a higher price. You can buy a property at a lower price by purchasing a house that needs renovating, buying at a property auction, or even taking advantage of a downturn in the market. The UK government also lists land or property available for purchase.

Flipping a property doesn’t necessarily mean having to fix up a house before selling it; to some people, it refers to residences bought at a discount (through repossessions, for example) and put immediately back on the market at a higher price. To others, flipping a property involves investing some money and refurbishing a property, as long as the final price is worth more than the overall expenditure. If you’re looking at raising capital to invest in properties to rent, flipping a property is a good way to begin. You will need a savings stash upfront, especially if you’re looking to boost your profits on an older or run-down property by injecting some cash for renovations. 

Buy To Let

Buy to let refers to the process of purchasing a property that you will rent out to tenants. It may be a house or an apartment. In the UK, you have the option of taking out a buy-to-let mortgage if you are looking to buy a house to rent. These mortgages are traditionally available to those that already own (or have an existing mortgage on) a property themselves. The upper age limit of these mortgages usually is 70 (you must be under 70 when the mortgage payments end).

The critical factor in purchasing a property is the location. Consider not just the general area, but where in a particular town you want to buy. When you’re looking to lease a property for the first time, buying local might be the best option. Local purchases allow you to be nearby should any problems arise or close-by if initial renovations are required. However, you might not live in the best area of town for rental prices, so consider where the best place to buy is before buying a property on your doorstep.

Renting Holiday Homes

If you’re lucky enough to own a holiday home, leasing it when you’re not there could make money from the property. Holiday home complexes like bsp 21 typically include everything the renter could want, from tennis courts to pools, cafes, and restaurants. So if you find you’re only there a portion of the year, why not rent it out for the rest of it?

If your holiday home is in the UK, you are eligible for certain exemptions as a business owner, depending on how many days a year it is available to let. To lease a holiday home, you will typically need a traditional homeowner’s mortgage rather than a buy-to-let one. If you aren’t based in the UK, you can still invest in UK property and use it or rent it out as a holiday home..

If you own a property abroad, a property management company can help manage the rentals and tenants smoothly. However, before you invest in an agency, it will be worth considering if renting your property will make you money. Overall, though, you are likely to save money and time in the long run as a Cincinnati property management company will handle a large proportion of communication with renters.

Renting To Multiple Households

If you’re looking to boost your income by renting out a property to multiple households, you will need a House in Multiple Occupation (HMO) licence. The rules vary from council to council but generally refers to any property rented to more than five people and more than one family. It covers properties with shared communal areas, like kitchens, bathrooms, or living spaces. 

Each UK residence you own with multiple household tenants requires an HMO licence, and you are legally obliged to provide safe and suitable living conditions for your tenants. You are also subject to unlimited fines if you lease out an HMO without a licence. While a multiple occupancy household might seem like an excellent way to make money, it’s crucial to weigh up the cost of the licence and any property upgrades and whether this still allows you to make money on your investment.

The Risks Of Investing

Property is not immune to market downturns or unexpected costs from repairs or even damage from tenants. If you own a buy to let property but can’t find a tenant, you might find yourself losing money on your investment for a while. Recent legislation has also changed how much tax relief landlords can claim each year, dropping from 40% to 20% for 2020-2021. If you need advice on protecting yourself from the pitfalls of property ownership, a property mentor could help guide you through your first year in property investment.

Investing in property is a lucrative business if done correctly. There are around 2.5 million landlords in the UK alone, and the real estate sector brought in 68.3 billion GBP in 2018. If you want to invest in a UK property, then property flipping might help raise capital, as long as you have an initial deposit and have assessed the money required to make a profit. If you’re looking for long-term investment, then renting out a home in the UK or abroad could bring in a regular income, but is still subject to risk if your tenants can’t pay, or there is no one renting for long periods. But, provided you’re prepared to take the risk, you might find yourself ditching your full-time job for a living in property investment.