How to create an income from a passive investment 2017
Over the last few years, billions of pounds have been poured into a rental market that has become more and more popular with tenants.
In a market that used to be owner-centric, fewer people than ever before now choose to own the home they live in, with only around 60 per cent still doing so, and more than five million people living in privately rented accommodation.
This demand from tenants has meant more investors putting their money into rental homes than at any time in the past.
Click here to read the history behind the UK’s buy-to-let industry.
However, for many there are still some considerations that will stop them buying in one of the most profitable asset classes around. Chief among these concerns is the time constraints they may have. Many people expect that when they own rental property, they have to be a hands-on landlord, dealing with tenants and the property on a day-to-day basis, and it will put many off investing, particularly if they already have a busy job.
However, there are more passive ways to invest that allow those who don’t want to be a traditional landlord to still enjoy the benefits of the rental sector and the riches that come with it.
What are passive investment opportunities and what benefits they offer to landlords?
What is passive investment property investment?
Passive investment property in the rental market generally means that investors can buy rental stock, usually off plan or in larger developments, and not have to worry about the day-to-day side of being a landlord. It means that you can just put your money into the investment and then sit back and wait for the profits to come in, without having to spend your time managing your property and tenants.
In passive investment, property managers – normally the developer of the property in cases of large scale builds – will take care of the everyday management of it. It means that they find tenants, deal with incoming rent and other charges, deal with move ins and outs, and also maintain, repair and liaise with tenants on your behalf. It can be an even lower-contact form of investment than, for example, working with a letting agent, because the manager will not even need to get in touch with the investor for approval on maintenance and repair jobs.
Generate passive income through property
Passive property investment is the ideal option for those who have money to invest, but are time poor. With yields in certain parts of the country like Liverpool now hitting more than six per cent, and demand still high, there has rarely been a better time to invest in the private rented market in the UK.
Passive investments open the market up to those who might previously not have had the time to become a landlord. Whether investing in student or mainstream residential properties, having the chance to buy residences and enjoy the profits these can bring you will be a far easier prospect if you are one of the many who just don’t have the time to manage the property yourself.
And not only does your property get managed on your behalf, but you also enjoy other benefits, such as the fact that many passive investments will offer you an assured ROI for a set number of years. It means that not only do you not need to worry about the day-to-day management of your property, but you also don’t need to be concerned about the money it’s making in the early stages.
Overall, passive investment is one of the best ways to invest in property without stress. It allows you to enjoy peace of mind in your rental market purchases and welcome the profits that come with the sector without any of the related stress.