Investment Opportunities

There are a range of different ways to invest money, and it’s understandable to be confused on which investment route to take. The main investments that most people make are buy to let property investments. But which of these investment opportunities holds the most potential?

To work out which investment type is right for you, you should think about the level of risk you’re happy to accept. This is why for a lot of investors, the property market is a better option. Not only is property investment classed as lower risk, but buy to let investments also offer two types of returns through rental income and capital appreciation once you sell your property.

The area that investments in property are based in has a big impact on the success of your investment, not only in terms of returns but also your personal budget and investment goals. Good investment opportunities will be based in the top UK cities for buy to let investment, so getting a better idea of these locations is a must, especially if you want to keep a low level of risk. Here are some of the most important elements you should keep in mind when researching the best investment locations in the UK.

Look at Rental Yields

To make a property investment successful, you need to generate high rental returns. Rental yields are an indicator of how significant your rental returns could be, and higher rental yields can signal the best investment opportunities. So what are the best UK cities for rental yields?

In a recent study from Totally Money, a list of the top 25 buy to let postcodes was revealed. Within this list, Liverpool was the city boasting the number one rental yield postcode, thanks to the L1 postcode’s impressive yields of 10.00%. Following the L1 postcode is Falkirk in Scotland which boasts yields of 9.51%, and Glasgow with 8.71% yields. Other cities mentioned on the list include Leeds, Sheffield, and Leicester, but Liverpool is by far the most popular city, with a total of six postcodes making the list.

It’s evident that compared to property investment opportunities in London, the North of the UK is home to some of the strongest rental yields in the country. Rental yields in London, for instance, come to as low as 2.28% in the WC1X postcode. This is why, by researching online, UK property investment opportunities with the most potential will reveal themselves when you factor rental yields into your investment criteria.

Think About Capital Growth

The beauty of buy to let is that rather than just offering one type of return on your investment, there are two – rental returns and capital growth. In order to benefit from both of these returns, however, you need to look for property investment opportunities in areas with a strong potential for capital appreciation as well as high rental yields.

When you look at property price trends, it’s evident that UK property prices are rapidly growing. In a recent report by Savills, it was revealed that property prices in the North West and Yorkshire and forecast to see significant house price growth over the next five years. In the North West, property prices are expected to grow by 20.2%, while Yorkshire prices are set to see an increase of 20.2%. If this is the case, a property such as One Baltic Square in Liverpool which is priced from £121,950 would be worth around £150,000 in five years. With this North West growth in mind, investments in Liverpool and Manchester are definitely worth exploring to benefit from high returns overall.

Consider Affordability

Along with rental yields and capital growth, Liverpool investments come out on top in terms of affordability. According to a recent property statistics from Zoopla, property prices in Liverpool average at about £178,105 as of February 2020. When looking at flats specifically, the average price for a one-bedroom flat stands at just £98,831, which is worlds apart from London’s average of £476,419 for the same property type. Many investments in Liverpool are also priced under £100k, allowing you to benefit from excellent returns for an affordable price in a prime location.

The next step after researching locations for the best property investment opportunities is to research the companies themselves who are selling investment properties. The types of businesses involved with investments in UK cities include property investment companies, property agents, property developers, property management companies, and construction companies. The company you choose to in invest with – whether this means the property investment company or the developer – is a major element of your property venture. If you invest with the wrong company, your investment could suffer massively, and you could face risks including loss of income or end up having a difficult experience overall. Due diligence is such a vital step towards finding the most trustworthy UK property investment opportunities.

Read About the Company

One of the first things you should do as part of your due diligence process is to read about the company you’re interested in investing with. It’s likely that while looking online for investment opportunities, you’ve come across a few possible options being offered by an investment company.

Before looking into the investment opportunity itself, you should spend a bit of time reading up on the company selling it. Look for information such as how long they’ve been operating for, where they’re based, who their team are, and learn a bit about their backstory. Be wary of companies who only launched very recently, as this could mean they’re less experienced and don’t have a lot of knowledge on the industry.

Look at Company Reviews

Another step you should take when conducting due diligence is to read customer reviews for the company. These can normally be found on websites like TrustPilot or Google Reviews and can be a good indication of whether the investment opportunities and the company itself are worth exploring further.

If a company has a lot of beaming reviews and a high average rating, they’ve likely been operating for a long time and left a lot of investors satisfied with their purchase! Things like good communication, friendly service and an easy investment process are all qualities to look out for when reading customer reviews.

Arrange a Meeting/Viewing

Once you’ve researched the company and selected a potential investment opportunity that you want to explore further, you should look into arranging a meeting or property viewing before making your final decision. This stage of the property investment process will give you a chance to ask some more questions about the property, find out more about the company, find out a bit more about the area it’s based in, and hopefully take a tour of the property or the development site.

If the property is off-plan, it’s unlikely that a tour of the physical property will be possible as it will still be in the construction stage. In this case, you may be able to view CGI images of the property during your meeting or view a show flat for an idea of how the property is expected to look. Here at RWinvest, we even offer our investors the chance to use a Virtual Reality headset to take a CGI tour of certain developments.

This is the stage of the investment process where you will decide whether or not to go through with your purchase. You should trust your instincts at this stage and pay attention to your overall feelings towards the property investment opportunity itself and the company selling it. If the venture ticks all your boxes and you feel confident that it will bring you success, you should trust your gut and make the first of many investment opportunities!