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How to go about property investment

Real estate investment is becoming a lucrative business in the UK. It is gradually surpassing shares and savings in the amount of return on investment. The best thing about property investment is that it carries little risks. Chances of an investor losing his capital are very low. The growth of capital is also more or less automatic. You do not necessarily have to put in more money into your investment for the capital to grow. The housing market is experiencing rapid growth every other year. If you buy a property today, it will be worth much more in five years time.

Property Investment Zones

Property investment, like any other type of investment, must be planned for carefully. The place where the property is located determines how much return on capital the owner will get. Residential properties must be in areas where people prefer living in. In the UK, London is one of the cities that have attracted many homeowners. This is because the city is filled with various opportunities that people can exploit. The amount of real estate investment gradually declines from Zone one and two to Zone four and five. Zones six, seven and eight are yet to experience massive property investment.

Places similar to London zone one are similarly highly populated. Long term investment in these areas can be very profitable. The problem with investing in areas where the housing market is concentrated is that investment capital is always very high. It is cheaper to buy a property in zone eight than in zone one. Areas such as zone one are best left to investors who are willing to invest huge capital to enjoy quick profits.

Rent in zone one is as high as capital for property investment. Since 2016, an increasing number of people have been moving from the inner boroughs of London to the outer boroughs. This trend has been seen in other big cities in the UK. The implication is those city suburbs will in time experience rapid growth in real estate development. Return on investment in the city suburbs may currently not be appealing. However, with people migrating from the city to the suburbs, rent on the outskirts is expected to increase appreciably. The suburbs are a good place for long-term property investment.

Type of property to invest

The type of property you invest in also determines the return on investment. Property investment targets people who need accommodation. These people can be students, highly skilled workers and even low-income earners. These people have different needs. Some will want spacious houses while others will need decent flats. You can take a good look at the place you want to invest in and see the type of people living there. If your property is near universities and colleges, you will need to concentrate more on hostels. Flats are mostly seen just on the outskirts of city centres. The flats majorly target middle-class people who work in the city. If you are investing further out of the city centre, you may want to buy a residential home. The type of home ownership will also determine your ability to attract buyers.

Posted by on 18/01/2017 in Property Investment

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