There are plenty of ways to have an income from property. From coming the landlord of your own buy to let, to investing in a Crowdfunding project or providing finance for a property redevelopment via a Peer 2 Peer Lending scheme, there are many routes you can go down. The two questions you have to ask yourself is
- How active in the money-making do you want to be?
- How quickly (or not) do you want the cash?
Active involvement in your property investment
Buy to let
Purchasing a buy to let property and acting as a landlord to tenants isn’t as lucrative as in the past – thanks to Stamp Duty on second homes and the cutting of landlord mortgage interest relief. However, it is still possible to make money from this kind of investment provided you choose the right location, giving you a good yield. In addition, to receiving a monthly rental income, you can also look forward to capital appreciation as the years accrue.
It became almost fashionable a decade or so ago to buy a run-down property that needed lots of physical repair work done to it, then selling it on at a profit. Shows such as property investing expert Sarah Beeny’s certainly got us all interested. But theneveryone was at it; refurb properties weren’t as plentiful and many people got their fingers burned. This is a good money-making strategy but only if you really know what you’re doing. Having friends in the building trade helps!
Hands-off investment in property
Investing in a property development opportunity, such as a block of apartments or a commercial retail outlet doesn’t require you to do anything with the property, except buy the property shares, sit back, and hopefully pick up a nice bit of interest – along with your original investment – once it’s been completed and sold on.
This is similar to shares in that you are buying into what is usually a buy to let opportunity and don’t have any physical involvement other than to choose which apartment you want to invest in. You’ll usually get a percentage of monthly returns (similar to a hands-on landlord) and benefit from capital appreciation. Property management, rent collection etc is carried out by a managing company (who will take a percentage of your monthly return).
Peer 2 Peer Lending
It’s possible to provide the cash to help build large property developments, such as a block of new apartments. Unlike with property shares you’ll know more about what you’re investing in and like Crowdfunding will be able to choose projects that resonate more with you as an investor. You’ll receive interest and your original investment once the development is sold on. Peer 2 Peer Lending is a relatively new form of finance and although it’s regulated by the Financial Services Commission (FSC) any losses aren’t covered by them (unlike High Street banks).
The above are some of the main ways to invest in–and (usually) make money from property. To speak to someone about buy to let opportunities contact the team today on 0333 577 0733 or drop us an email to info@iLetproperties.co.uk.