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Best Property Investment Strategies

As investing in UK property continues to become more and more popular, it’s becoming harder to settle on an ideal property investment strategy. With too many options you can choose from, you may feel overwhelmed at all the property investment strategies that are available. But don’t worry. In this web page you'll discover the best options for property investment.

What Are the Best Property Investment Strategies UK? When it involves making an investment in the UK property market, property buyers have 3 predominant choices. They can put money into a rental property and rent to tenants for a profit. Property investors can purchase a property and re-sell for a profit. A property investor can also own a percentage of a corporation that owns property on their behalf. However, it may get a little more complex than that, with different property investments techniques falling into each of these categories, all coming with their own pros and cons and ranging suitability for different people. This is precisely what we're going to talk about on this blog, as we break down the pros and cons of the best assets funding techniques actual UK property has to offer.

Rent To Rent

For investment ideas in the UK, rent-to-rent may be a powerful and little-known strategy which could get you on the property ladder without paying a big price tag. Rent-to-rent is when an investor rents a property from a landlord, then rents it out to a tenant. The investor who rents out the property from the owner has the duty of finding tenants, upkeeping the property, and paying property bills, while rental fees that the investor is required to pay will normally be discounted to allow for profit to be made.

Single Let Residential Property

As far as rental properties go, single-let is the most traditional and easy-to-understand example of property strategies in the UK. A single-let residential property in real estate that is rented to a single 'tenant', which may be an individual person or a whole family. Single-let residential property has been long considered the best property investment strategy in the UK for 2 major reasons:

Rental Income – property investing generates rent each month, which has reached an all-time excessive of £1,199 PCM in the residential UK market.

Long-Term Growth – despite the economic pressures seen at the end of 2022, UK property prices have increased by 5.52% in the previous 12 months, consistent with the Land Registry, which is set to increase by an extra 6.2% by 2027 in line with predictions from Savills. For these reasons, you should expect a profitable strategy whilst shopping for property.

A top contender for the best property investment strategy, purpose-built student accommodation has shot up in demand since 2019. Purpose-built student accommodation is another kind of buy-to-let property investing strategy. The only evident difference is that with PBSA, you'll rent wholly to student tenants. A record from Savills in early 2021 determined that over £5.77 billion was spent on student accommodation in 2020 – the most-ever amount in a single year. This goes alongside a thriving UK student market, which has seen the number of 18 year olds applying to an undergraduate course in 2023 rating as the second highest on record – with 314,660 applying, down barely from 320,420 in 2022. However, it's significantly better than the pre-pandemic figure of 275,300. With many college students in search of fashionable and well-located accommodation to stay in at some stage during their time at university, there's likely never been a better time to put money into a student buy-to-let strategy.

Top tip: Focus on student cities with a higher student population and graduate retention rate to ensure tenant demand. Examples of top student towns are Liverpool, Manchester, Birmingham, Leeds, London and Newcastle.

Purpose Built Student Acommodation

A top preference for any property portfolio, an HMO is another top-notch example of top property strategies in the UK. An HMO, otherwise referred to as a residence of multiple occupancy, is real estate that is rented out to multiple tenants who each pay rent and have shared facilities, like a kitchen. Certain types of student accommodation fall under the category of an HMO, with shared student homes being an opportunity to purpose-built student accommodation. HMOs have fallen in reputation amongst students in current years, who are opting to stay in higher-quality accommodation that can't be supplied by HMOs that tend to be older buildings. So, at the same time as a property investor can earn some big returns on the HMO property market, it's probably not the best property investment method to target students.

HMOS

BUY TO SELL

The first non-buy-to-let strategy on this list, buy-to-sell is one of the most attractive property investment strategies in the UK. Buy to sell, otherwise referred to as house flipping, is when an investor purchases a property that needs refurbishment and sells it for a profit. Buy-to-sell is typically grouped up with property development, as traders will commonly need to complete renovation work to increment the value and appeal to potential buyers. Unlike a buy-to-let strategy, this kind of property investment strategy doesn't involve renting the property out to tenants and doesn't depend upon a regular income. Instead, it is based on a sturdy property market and positive market conditions with high demand. This appears to be the case in 2023/24, with a report from Rightmove finding buyer demand to be 6% higher than that in 2019. Of course, you could completely become a property developer and build one property from the ground up.

COMERCIAL BUY TO LET

When it comes to property strategies in the UK and property investment ideas, a successful preference in recent years is commercial buy-to-let. Here, an investor will buy a commercial building, that could consist of an office block or retail space and rent it out completely to organizations and business owners. While investors may also struggle to find sellers for commercial property, commercial buildings have a tendency to have longer lease intervals than conventional buy-to-let, making it less complicated to secure a long-term tenant and get a steady cash flow. However, commercial property may be hit heavily in times of economic struggle, just like the financial crisis, something that a potential property investor needs to keep in mind before they decide to adopt this alternative property investment to standard buy-to-let.

HOLIDAY LETS

Another property investment idea that is becoming popular is holiday lets, which is another kind of buy-to-let property investment strategy that many UK investors go for.

Like residential or student buy-to-let, making an investment in a holiday let involves purchasing a property – whether a house or apartment – and then renting it out for income.

These types of properties are let out on a short-term basis as they're rented through those in search of somewhere to stay whilst on holiday.

Also referred to as serviced accommodations, these properties will usually be listed on websites like Airbnb and different platforms to showcase holiday rentals.

HOTEL LETS

If you're looking for different property investments in the UK, hotel lets are a very niche investment strategy you might possibly not have thought of when thinking about a rental property investment strategy.

Hotel room investments are when an investor purchases a room inside a hotel and generates profits from guest stays.

Instead of getting a full-time tenant like different buy-to-let strategies, an investor will benefit from those travelling for business or a holiday.

Hotel lets are perfect for UK investors who need a completely hands-off investment whilst making an investment in property.

CROWDFUNDING

Getting into a niche alternative property investment, property crowdfunding is an exciting strategy for those who want to indirectly own property. Property crowdfunding is when a group of investors collectively pool their funds to buy real estate, with each investor owning a percentage of the asset. While you could try this with friends, property crowdfunding typically refers to an online platform that secures funds from multiple investors and then manages the property on their behalf. After the online platform generates sufficient funds, it then creates a limited company, with investors given a percentage in the corporation representative of the funds they invested. As an alternative to buying property, crowdfunding may be an extraordinary tool, with investors only wanting to spend around £1,000 instead of the £30k, you will typically need to buy less expensive housing in the UK. Of course, the trade-off is that you will earn significantly less profits than owning a single property.