London is a powerful financial hub and low interest rates mean that buyers can expect to be well-leveraged with plenty of options for borrowing. Capital appreciation has been strong, while rental yields have remained consistent in the face of increased competition from other investments.
Investors are faced with a wide array of properties to choose from which means they don’t need to invest too much time researching before making an investment decision on property. A savvy initial buy-to-let purchase might morph into housing your son or daughter studying abroad or serving as your second home at some point down the line–or both.
There are many ways to make the most out of your London property. These include:
Buy to let is one of the most popular methods for making money out of property in London. The process can be as simple or complex as you want, depending on your level of investment and what type of properties you are interested in renting. You’ll purchase an apartment that will then generate rental income from either students or residential tenants who need a place to live near their school/college campus, all year round.
London has a booming house and rental market, with rising costs in rent and demand being seen across the country. For those wondering how to make money from buying properties for renting out, do your research on rental yields. When you invest in buy-to-let property or any other type of housing that can be rented out at regular intervals, there’s always an option for guaranteed returns.
Property renovation is one of the most popular types of investments. Rather than focusing on rental properties, this type involves refurbishing a home for resale at an increased value. The best way to make money from your renovations depends on how knowledgeable you are about the area in question and what areas have good prospects for capital appreciation through new developments or infrastructure changes.
Property renovation can be lucrative if done properly with enough market research beforehand. It is therefore important not only to know where markets might benefit by improvements but what kinds of things should be added as well (such as more modern appliances).
- Let the property while you’re away.
It can also be profitable to let out your property to someone who’s in need of a place to stay for a number of days. While you’re away, the lodger pays rent and cleans up after themselves. If it’s done right, you could make some tidy profits during this time.
For instance, property owners in East London were able to make a profit by letting their homes to tourists who went to see the 2012 London Olympics. Rentals went at around £5k per week, which was already a good amount of extra cash in exchange for a short-term stay in the city.
- Convert the property into a flat.
Converting houses into flats is a smart move for investors; with the increase in first-time buyers struggling to get on the property ladder, it’s clear that there are many prospective renters.
Generation rent is very real in London. Barely half of all families across the city own their own home, and many of them cannot just afford to rent larger properties. Renting a flat becomes a more viable solution, and continues to be sought after in the London property market.