This year has made for some tough business decisions, given the uncertainty surrounding the global pandemic. One thing that remains certain, for the moment anyway, is that the property market is flourishing despite the effects of Covid-19.
Property investment has been a fantastic way of putting money to work for an extended period of time, to then reap the rewards further down the line. So, it comes as no surprise that experienced investors use the property as part of their investment portfolios. Although we can’t predict what will happen to the market, given the current circumstances, we can compare previous years and recessions and what affects this had on the housing market, however. Regardless of the financial crisis in 2008, the property market remained relatively stable, producing some attractive returns for investors.
As specialists have predicted, following on from the past nine months, property prices are set to continue rising – having seen some of the highest sales recorded in the last ten years. Although no one knows precisely how this sector will be affected, from what we do know, it’s worth looking into property investment as a feasible business strategy, for you should be able to maximise your returns, – at least for the next few years.
As the property market remains resilient, and if you have the capital to spare, start exploring some of the reasons below on how this type of investment could be profitable for you and your future finances. During the last year, property companies have adapted their own business strategies to cater to clients’ needs and ensure that they can still offer the best service and deals to both current and potential investors. Read on to find out why you should decide to add property investment to your portfolio in 2020.
How Did the Property Market React to Covid-19
As mentioned, the property is considered to be more reliable when it comes to investing your money, as opposed to other markets like stocks and shares, which are often more volatile during an economic crisis. This is just one of the many reasons the market is currently thriving. Other factors that make the property market attractive are regeneration projects that are still going ahead, as well as the demand for rental properties given the rate of unemployment at the moment. For those investors looking to secure a buy to let property, and providing they choose a popular area, should be guaranteed consistent rental payments for years to come.
For those trying to land property deals in lucrative areas like vibrant city centres, they’ll have to abide by current restrictions. The property market saw a slight dip at the start of the pandemic. Still, it soon made a speedy recovery, as property developers, agents and investors started to implement technology to speed up the process and continue securing deals despite any travel or social limitations that have been put in place. People looking to sell to potential buyers have been busy working on virtual reality software and 3D tours to provide ‘as close to the real experience’ that they can, with the technology that’s available. This opens up the market and offers a personal experience of a property to future investors and can be done from the comfort of their home, anywhere in the world. No doubt this strategy will remain in place even after restrictions are lifted, as it’s very useful to overseas investors who require a hands-off approach when adding to their portfolio. As someone who may want to invest in property, it’s worth looking for companies that utilise the latest digital software, to make sure you’re getting a high-quality, up-to-date representation of what it is you’re perhaps going to buy.
The Rise in Tenant Demand
Savvy businessmen and women that consider a buy to let investment can benefit from areas that are currently growing with plans in place for future improvements too. Properties within vibrant city centres are highly sought after as the value of the property is set to increase over time as more and more people looking to live in these modern areas. Since the unemployment rate is rapidly rising and is set to peak in May/ June of next year, renting is becoming increasingly popular, and many people who were looking to become homeowners could now turn into potential tenants. Choosing the right place for your property is crucial if you want consistent rental payments and positive house price growth on your investment.
Although buy to let investments can provide you with additional cash-flow payments in the short-term, property investment is generally a long-term commitment, so be mindful that if you want long-term results, your capital may be tied up for a while. In order to receive the best rental returns, you’ll need to secure an apartment or house with a high rental yield. Typically those areas with promising yields will deliver a high level of capital appreciation on your property investment too, as the value will be set to increase in places of interest and can provide a substantial pension fund or inheritance further down the line.
Before making the decision to invest in property, be sure to carry out your due diligence. There are many different property guides available, for free, online, where you can discover some of the best rental yields. If you were looking for deals in the UK, the best yields, according to RWinvest, are in the north-west of England in the cities of Liverpool and Manchester. If you’re looking for properties outside of the UK, be sure to scope out reputable companies in your area to see the highest yields available in the places relevant to you. If you’re researching areas yourself, look for cities that have a large student population and great career prospects, as young professionals will likely want to live in these places.
As with any investment or business decision, it’s best to widen your financial portfolio to minimise the level of risk when it comes to protecting your money. It might be worth speaking to a financial advisor, after conducting some research, to find the best strategy for you.