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Insight & Opinion

What to consider when planning your income investment strategy

Author: Gemma





If you’re looking into opportunities for income investment – an approach that allows you to gain a regular, passive income from acquired assets – UK property could well be on your radar.

The country’s housing market has a proven track record for retaining value and delivering returns to investors, even during times of political and economic uncertainty. Proof of the sector’s resilience can be found by looking at the consistent performance it has shown in the years since the Brexit vote.

To get the best out of any income investment – especially in a diverse and complex market like UK property – it’s important to have the right strategy.

Here are some of the key strategic considerations to take into account when planning your income investment strategy:

Where to invest

One of the biggest advantages of the UK housing market is its diversity, and this extends to the range of locations available to investors.

London and the south-east have traditionally been seen as the most attractive and potentially profitable destinations – particularly by overseas investors – but in recent years it has become clear that regions like the Midlands and the North have just as much to offer.

The latest price growth trends have shown regional cities outpacing London and southern England.

Experience Invest has produced a series of in-depth guides looking at property investment opportunities in cities like Cardiff and Liverpool.

Which asset class?

As well as being home to a wide range of attractive destinations, the UK offers a choice of asset classes for investors, all with their own attributes and advantages.

One space that has seen a lot of growth and development in recent years is purpose-built student accommodation, which is attracting investors with strong tenant demand and the promise of healthy rental returns.

Hotel suites can also prove attractive for income investment owing to the higher-than-average yields on offer – particularly in popular tourist towns and business travel destinations – while mainstream property in the private rented sector usually offers better prospects for capital growth.

Are you willing to buy off-plan?

It’s advisable to decide whether you’re willing to buy off-plan – which involves committing to a purchase before the property is built – as part of the process of preparing for your investment.

Off-plan investment can have big advantages, such as the potential to secure a lower purchase price while the property is in development, reducing your initial outlay and increasing your scope for long-term capital growth.

However, you also need to be aware of the other considerations involved in buying off-plan, such as the need to pay money upfront to acquire an asset you can’t see or examine until it’s fully built.

Exiting the investment

Exit strategy is an important aspect of any income investment strategy. As well as educating yourself about what you’re buying and the returns you can expect to receive, you should have an idea of how you plan to exit the investment when the time is right.

Experience Invest’s Exiting Investments report showed that 20% of buyers don’t think about how they will get out of their investment before making a purchase.

It’s wise to take a long-term view and consider how you will offload your assets when the time comes. One of the advantages of real estate investment is that property can be sold relatively easily on the open market, so there is a good chance of you being able to exit your investment without too many complications.

If you would like to find out more about income investment opportunities in the UK property market, or would like to discuss your current income investment strategy, book a consultation with Experience Invest or call us on +44 (0)207 834 1113.

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