Investing in the future has become a rather common trend in the modern world. People are no longer happy with simply putting their money aside in savings accounts, and instead take a more proactive approach to boosting their finances, with a number of asset classes, such as rented property, gold, stocks and shares all high on the agenda.
But when it comes to investing your money for the future, not everyone is the same, and choosing the right asset class for you is a big step. Some will offer steadier and slower levels of income over long periods of time, while others are designed to maximise short-term impacts.
When it comes to investing in any asset, including buy to let property for sale in the UK, there are a number of questions you should always be asking yourself.
Three things you should ask before you invest in rented properties…
How is the market developing?
It’s always important to look at the way the market for any asset class is performing at present before you make the choice to invest in it.
How to determine a good rental property? For example, is the stock market subdued, are currencies stalling rather than growing, or is the property market thriving? At the moment, the latter is performing very well for investors.
House prices continue to be slow in terms of rises, while owners are welcoming ever increasing demand and prices. The Association of Residential Letting Agents reported a 1.8 per cent rise year-on-year in each of the last two months, even at a time when rental stock has jumped by 11 per cent, which underlines just how well the market is growing.
What sort of ROI can you expect?
Return on investment is important whenever you are putting money away for the future, and it’s important to know what to expect before you bank on an asset. Look at what you can expect in the long term (capital gains) and in the short term (monthly income) to decide if the money you’ll be getting back is worth your outgoings. Also look at any asset classes, such as property with Experience Invest, where you can get assured returns for a set period. Not only does this give you peace of mind for a number of years, it also gets your investment off to a great kickstart – ideal for investing in rental properties for beginners.
How will the finances work?
When it comes to financing a rental property, there are some questions you will need to ask yourself.
Will you be investing in cash, or are you likely to need financial help when it comes to your investment?
One of the big benefits of property is that the market is entirely flexible. The majority of newcomers to the market will get a buy-to-let mortgage to help them onto the ladder, but it’s just as easy to invest with cash, and there’s such variety in the market that you can invest with as little as £50,000 or £60,000, or as much as multiple millions. It means that, unlike in the past, the market is open to almost anyone, and is a fantastic way to invest no matter how much you are looking to spend.
How will the management of your assets work?
Another question it’s vital you ask yourself with any asset class you want to buy in is how hands on you want to be with your investment. For example, piling your money into the stocks and shares market might require you to be very active, moving your money around and buying and selling as often as possible to maximise returns, while other asset classes are more passive. For example, the purpose-built rented property market allows you to invest in a unit within a building, and then simply allow the management company to deal with day-to-day tasks like maintenance and lettings.
It means that those with a more passive outlook, and less time to spend, can rest assured that after they’ve invested, they are making money without having to micro-manage.