As an up-and-coming entrepreneur, you’ll usually want to keep your options open and your finances fluid. Tying up money in property, therefore, may seem counter-intuitive. Stocks and shares, bonds and so on can be quickly bought and then sold when the need arises or the time is right. Property is traditionally a longer-term thing and it’s less easy to realise your capital fast in times of trouble.
Perhaps, though, your plan is to make it rich and retire, in which case property is a sound investment. Setting some money aside for the future is just as important as managing the here and now. And every successful businessman knows the value of spreading the risk – as you spread the risk, you increase your options when one thing goes wrong.
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Invest in the UK or elsewhere?
Not so very long ago, the trend was for people to plunge their hard-earned savings into cheaper property abroad. Many have since fallen foul of struggling economies ñ think Spain or Greece, for example. These days, investors around the world are rushing to sink their money into UK developments. There are a number of reasons for this, not least because here in the UK, we benefit from a robust legal system that offers a good deal of protection against financial crisis and the like. The UK is even more attractive than other countries because there is no tax on land ownership: while tenanted, it’s the occupants who pay council tax or business rates. And despite the recent economic crisis which caused a housing crash worldwide, the UK property market has been otherwise stable for many years.
Won’t property management be a distraction?
Owning an investment property inevitably comes with responsibilities. Visions of midnight calls to unblock toilets and get the boiler fixed are unappealing; and definitely not what you need when you have a thousand and one other things on the go. Choose a great property management firm to look after your investment and all that’s included in the price you pay. It becomes somebody else’s problem.
What if I need my money back?
There comes a time when you may need to dispose of your property. Seeking the right firm that offers you a clearly defined exit strategy will mitigate much of the risk. In any case, though, having to factor in a delay while a property is sold can protect against knee-jerk reactions when something goes wrong, giving you time to think about whether selling is a step that is really desirable. Because often, it’s a funny thing about us entrepreneurs ñ the fewer options we have, the more chance there is of us coming up with a better solution to a problem. It sparks our creative juices.
What’s the best bet in property investment at the moment?
Student accommodation in the UK is right where it’s at just now. It has many attractions for the savvy investor. The British student market is burgeoning, with 38 of the world’s top 500 universities being based in the UK and attracting a lot of interest and wealth from the overseas market. Increased numbers of students creates a greater demand for accommodation, and property developers are seeking to capitalise on that trend. Purpose-built developments are springing up all the time ñ you only have to take a look around some of the peak growth cities, like London, Liverpool, Newcastle and Manchester to see student developments everywhere.
But development needs investment, so there’s an urgent need for serious investors. That doesn’t mean you have to be a Rockefeller or a Branson to take advantage of the market, though. Many developments are split down into self-contained units, so you can invest in as many or few as you want.
You’re almost certain of high occupancy levels and rising rental incomes over time. And ironically, the student market is a lot less fickle and easier to predict than the usual buy to let crowd.
All in all, do it right and property investment has the potential to offer you an ongoing income, secure and stable, on which you can build all those other risky and exciting options. Why not start building your portfolio today?
About Carson Derrow
