How to Make Money from Property with Buy to Let Investment

What are the Different Ways to Make Money From Property?

Investment is one of the best and most effective methods when it comes to how to make money in property, but what are the most common strategies used? If you’re interested in finding out how to make money investing in property, here are the most popular investment methods to consider.

Buy to Let

Buy to let is one of the most popular methods for making money out of property in the UK. The process of traditional buy to let is very simple – you will purchase a property (usually an apartment), and rent it out to tenants in order to generate rental income. This could either be a student or residential property, or commercial property. Some investors also choose more short-term buy to let strategies such as renting out an Airbnb holiday let, although residential and student buy to let is the preferred option as it brings consistent returns all year round. The reason that buy to let is considered such a good investment strategy is because of the potential to make large amounts of money from both rental income and capital growth. It is for this reason that buy to let is seen as a great way to boost your savings, according to the Big Investment.

The UK housing market and rental market is thriving, with rising rental costs and increasing demand being seen across major property cities. For those wondering how to make money from buy to let, rental yields are your answer. When you invest in a buy to let property, you’ll receive rental returns on a regular basis, often guaranteed if you purchase the property with an investment company.

In certain top-performing areas such as North West cities, Liverpool and Manchester, increasing tenant demand has led rental costs to rise. In the last five years, the average Manchester property has increased by a whopping 36.41%, with a 20-year growth rate recorded of almost 320% – the highest out of every major UK city. This is possibly down to the increasing population of young professionals and students – the most popular tenant groups for UK property. It is for this reason that if you want to know how to make money from buy to let properties, you should make sure you research the best buy to let areas to reap the full benefits of your investment.

How To Make Money From Buy to Let Rental Properties 

To understand how to make money from a rental property, you should make sure you buy a property in an area where rental costs are high but property prices are low. This allows you to generate the most attractive rental yields for your investment. A good example of this kind of city is Liverpool, where rental yields can reach almost 9% in some areas, and the demand for rental properties is high.

Pros 

• Once you know the tips and tricks of how to make money from rental properties, you can make a regular and guaranteed rental income.
• On top of rental income, you can make significant capital growth returns if your property grows in value by the time you sell it.
• You can often use a buy to let mortgage to help you pay for the investment.
• You can make your investment from anywhere in the world. For instance, if you don’t live in the UK, you can still invest in UK buy to let by enlisting the help of a property management company who will take care of the property for you.

Cons

• If you can’t find a long-term tenant for your property, you could suffer from a loss of income.
• Rental yields and capital growth can differ depending on the area you invest in.

Property Renovation Projects (Buy to Sell)

Property renovation, also referred to as ‘buy to sell’, is another of the most common investment strategies. Unlike buy to let, this kind of investment involves you purchasing a property for a low price and refurbishing it until the value of the property has increased. The key in how to make money from a property renovation lies with knowledge. You need to be knowledgeable about the property market in the area you’re interested in, identifying certain areas where property prices are set to grow through capital appreciation. You also need to know tips and tricks on how to add value to a home, which could mean having a good eye for interior design or property trends. If the property you invest in requires a much more intensive renovation, you may even need to get advice from a property developer.  Because of this, property renovation projects are usually taken on by property experts rather than those just getting started in property investment.

Property renovation projects can be successful if you do your research and properly plan out your investment. Past investors have had a lot of success with these types of investments, and they’re a good option if you want to generate returns in the form of a lump sum. Buy to let is often favored over property renovation projects, however, as this allows you to make regular rental returns on top of returns through the sale of the property.

Pros

• You can generate a large return on investment if you purchase a property in a high-growth area and make the right kind of renovations.
• The process of buy to sell can be quite quick depending on how long your renovations take and how long the property takes to sell, which makes it a good option for those who want short-term returns in a lump sum.

Cons

• If you don’t have the right industry knowledge, the investment could suffer and you could waste money on unnecessary renovations.
• Property renovation requires a lot of dedication and hard work, making it a tricky investment if you don’t have a lot of free time and are looking for something more hassle-free.

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