As real estate investment encompasses a large variety of investment properties, it is essential to explore your options and educate yourself about the types of properties and investment opportunities that exist.
The property market has undergone major changes in recent years, due to the economic recession. Today’s economic climate offers unique opportunities to buy below market value and distressed properties in order to generate rental income or to put the property up for resale.
1.Property Investment Strategies
Depending on the property type and location, you can invest in property with a variety of investment outcomes (exit strategies) in mind. Traditionally, the most common method is property resale. By exploring potential property boom areas, carrying out renovations or just waiting for the property value to increase naturally, many investors can profit from resale. Buying holiday homes is also a popular option. Second homes, usually located in tourist hotspots can serve as holiday homes and will generate rental income for the rest of the year. You can also purchase buy to let properties. These properties can provide you with a rental income throughout the year, and a substantial net yield from the very first year. read more to get info about this topic.
2.Types of Investment Properties
Residential Property- Residential properties are the most readily available options for individual investors who are looking for a steady cash flow or resale. The value of residential properties doubles approximately every 7-10 years, and rental yields also increase with the inflation, so if chosen properly, you can expect steady growth from a residential property investment.
-Commercial Property – Commercial real estate includes a variety of property types, such as retail shops, office buildings or industrial properties. Investors often partner with other individuals or investment groups to cover the potentially larger initial investment and the ongoing management costs. Commercial property investments can generate substantial profits and investors may be entitled to tax incentives if the commercial investment brings economic growth to the area.
-Buy To Let Properties – Properties specifically bought with the intention of generating income by letting it out is a popular and fairly straightforward investment option. When purchasing a buy to let property either in the UK or abroad, you have to carefully consider the amount of initial investment, the local rental market and potential rental yields.
-BMV Properties – Foreclosure properties owned by banks or on sale through auctions can provide unique opportunities. You can purchase a below market value property from less than $30,000, and can expect substantial rental yields and/or eventual resale at a much higher price. As a result of the economic recession, you can for example find excellent BMV property deals in the US.
-Overseas Properties – Overseas property investment has become increasingly popular in the last decades. Many people from the UK or Northern Europe have traditionally bought overseas properties in Southern Europe as holiday rental properties. Following the economic recession, and the growth of the foreclosure market in the US, the overseas BMV properties have also become fairly popular in recent years.
These are just some of the most popular property investment types, and depending on your investment strategy and financial means, you can always find a property investment option that will suit your needs.