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How to Start Investing in Property

Written by, Marija Petkova

Updated May, 13, 2022

Investing in property is a serious and long-term game that comes with a great deal of risk, but can be incredibly profitable if you play your cards right.   

If you don’t know where to begin, here are some tips on how to start investing in property in the UK.

Beginner’s guide to property investment

If you’re a beginner in the world of property investment, it’s important to get a solid understanding of the basics and follow the right steps in the right order if you want to successfully invest in UK property. 

Here’s how to get started.

1. Do your research

Research is a crucial part of any investment, including property investment for beginners in the UK. It will help you understand the different types of properties, and figure out popular investment strategies. If you’re looking for insight knowledge, you might want to reach out to experienced investors and ask for some tips. It’s also a good idea to learn more about investment platforms.

2. Find the right deal

Once you’ve decided on the type of property you want to invest in, you should start scouring the market for a good deal. In most cases, properties that are undervalued or in need of repair usually offer the best return on investment.

3. Get financing

If you’re planning to buy a property, you’ll need capital. You can talk to a mortgage broker to find out how much you can borrow, and compare interest rates from different lenders.

4. Manage your investment

Once you have started investing in property, it’s important to keep on top of things and manage your portfolio correctly. This means setting aside money to cover expenses such as repairs and maintenance, as well as emergency costs, and calculating your returns to make sure you’re getting the most out of your investment.

5. Seek professional help

Since investing in property can be a complex process for beginners, it’s always a good idea to seek help from a person that’s familiar with the field. This could be from a mortgage broker, financial planner, or even an experienced property investor who can offer advice and guidance. 

6. Have realistic expectations

Investing in property is a long-term game, and it’s important to have realistic expectations about what you can achieve as a novice investor in a given time frame. If you’re patient and consistent with your investment strategy, it’s possible to see good returns over time.  

7. Be prepared to take risks

Investing is a risky business. It’s crucial to understand the risks involved before making any decisions, but don’t be afraid to take risks if you feel they are worth it.

Main Types of Property Investment Opportunities in the UK

There are a few different types of property that you can invest in, as a UK resident. The most popular choices are:

Buy-to-let

Buy-to-let investments are probably the most common type of property investment in the UK and involve purchasing a property to rent it out to tenants. It can be a great way to secure a regular income and see capital growth over time.

Commercial property investment

Investing in commercial property means buying properties that will be used for business purposes. This could include office space, retail units, or industrial warehouses. These types of properties can offer higher yields than residential investments, but there’s also a higher level of risk involved.

Off-plan investments 

Off-time investment is the practice of buying a property before it has been built. This can offer investors the opportunity to get a discounted price on the property, which often results in higher return rates and capital growth when the development is completed.

Properties abroad 

You can also invest in the property market in another country, especially in places where the market is growing rapidly and has the potential for high rental yields. However, it’s important to take into consideration potential risks, such as currency fluctuations and political instability

Things to Consider Before Investing in a Property in the UK

Several factors can make or great a good investment and determine whether it’s a good idea to jump into the market. 

  • Capital or the amount of money you have available to invest in a property. The more capital you have, the more options you’ll have when it comes to choosing a property. However, always consider the option to invest in property with no money.
  • Time: Buying a property is a long-term investment, and you should be prepared to hold on to the property for at least a few years.
  • Liquidity is the ability of an asset to be turned into cash quickly. This is important for investments, especially in times when you need to access your money.
  • Risk is an unavoidable part of investing. The potential return of investment is usually higher when there’s a higher risk involved.

Property Investing in the UK: Should You Do It?

There are many reasons why someone might want to invest in UK property. 

First of all, the country has a stable economy and political system, as well as a strong housing market. Property values have historically increased in the UK over time. This means that investors can potentially see good returns on their investments.

There are also some tax advantages for investors, such as capital gains tax relief and stamp duty exemption on purchases of UK property.

Another benefit is the wide range of property and locations. Whether you’re looking for an investment property in the city or a rural country cottage, you are more likely to find something in the UK than in most places in the world.

Whether you should invest in a property in the UK depends on your circumstances and goals. If you’re looking for a stable investment, a property could be a wise choice.

Bottom Line

If you’re wondering how to start investing in property, the most important thing is to do thorough research, talk to experienced investors, and even seek advice from brokers to figure out whether it’s the right choice for your situation. Once you learn more about the market, you can start small and opt for more secure choices, like a buy-to-let.