1) Determine Your Goals
Before you get started, the first essential tip for how to invest in rental property as a beginner is to determine your goals.
By understanding what you want out of real estate investing, you can decide what strategy you want to follow and how long you plan to stay in your investment before selling.
- Are you planning for retirement?
- Do you just want extra cash on the side?
- Do you want short term returns, or are you willing to wait before seeing sizeable returns?
By answering these questions, you will inform every action involved in real estate investing and help determine what type of property investment strategy you’re looking for – something we will discuss in tip two.
2) Choose a Rental Property Investment Strategy
Now that you know your goals and whether you’re looking at a short-term or long-term investment, it’s time to consider what rental property investment strategy to consider.
Wondering how to start investing in rental properties? There are different types of investment property that you should explore.
Below you can find five of the most popular investment strategies for UK property investors.
- Residential Rental Property – The most simple form of rental income. Here, investors will buy a home to rent to a tenant.
- Student Accommodation – Purchasing purpose-built student accommodation to rent specifically to student tenants.
- Commercial Property/Business Property – Buying a property to rent to businesses or corporations.
- Buy to Sell/ House Flipping – Purchasing a home, increasing its value and then selling it for a profit. Usually involves making repairs and adding furnishings.
- Holiday Lets/ Vacation Rentals – Investing in a vacation home and renting it out on a short-term basis to holiday goers. You can buy vacation rentals both domestically and abroad.
Each of these strategies comes with its own pros and cons and will be differently suited depending on your goals.
You can learn all about the pros and cons of each strategy and how to start investing in rental properties by checking out our property investment strategies guide.
If you’re interested specifically in student property, you can also read our dedicated guide.