The Five Best Ways to Invest in the UK Real Estate Market 2020

Are you thinking about investing in real estate? This can be a smart area to invest because it can provide protection from adverse economic conditions while also providing excellent return potential and allowing you to diversify your portfolio. It can also be a complex area and it is hard to know where to put your money, so if you are a new investor or simply looking for some tips then read on to discover the best opportunities in the UK real estate market.

Rental Property

Most people enter the real estate market by purchasing an investment property (or multiple) to rent out to either residential or commercial tenants. This can be profitable because there is always a demand for rented properties along with equity appreciation, but you must keep in mind that this can be a lot of work even with a property management company and it can be a huge cost to buy your first rental property. You can mitigate certain risks like tenants failing to pay rent through landlord’s rent guarantee insurance from specialists like HomeLet.

Vacation Rental

A vacation rental property is different to a regular rental property because they are not long-term and instead hired out to holidaymakers. This means that you can use it as a second home when nobody is using it and this also makes it easier to finance if it meets your lender’s definition of a second home. This does require more marketing and management which also makes these areas more expensive.

Fix & Flip

Flipping houses is another common and smart way to invest in real estate provided that you have the time and money to do so. This simply involves purchasing a property and then making repairs and improvements so that you can make a profit when ready to sell. This has risen in popularity due to TV shows on the subject and it can be rewarding but also hard work and there is a lot that can go wrong which is why you need to do your research and have a plan in place.

Real Estate Investment Trusts

Real estate investment trusts (or REIT) are companies that own and manage real estate assets with many trading on stock exchanges which means that you can get involved easily online and with little capital. This allows everyday investors to get involved with real estate that they otherwise would not be able to and these can be good long-term options and a smart way to diversify but it is important that you know how these companies work before getting involved.

Real Estate Crowdfunding

Crowdfunding has transformed many areas of modern life, including real estate investment. Crowdfunding enables an investor to provide capital to a developer in exchange for an equity interest and you can easily find these opportunities on crowdfunding platforms (which ensures they are legitimate). Return potential is huge with this approach but there are concerns, including execution risk and liquidity.

Any investor looking to get started in real estate should look into the above options, all of which can be a smart addition to your portfolio.