There are a lot of difficult decisions to make once you leave school, university or college – and a lot of them relate to money. The millennial generation has come under fire from governments pushing for privatization, the rising spike in inflation and a more competitive job market. As a result, leaving the comfort of your student loan, or the Bank of Mum and Dad, can be quite an intimidating experience. You may have an inheritance fund or a bit of money saved up to see you through, but knowing what to do with it isn’t always that straightforward. However, if you want to get straight into investing your money in the hope of a positive return in the future, getting into property can be a great route to go down. Plus, you may have already had your fair share of renting after University, or if you moved out of your parents home to live with friends or a partner. Renting offers great flexibility and can be fun, but as every knows, it can often simply be money down the drain. More and more younger people are looking to buy a property earlier on to try and beat the ever-rising prices. But you don’t necessarily need to move into the house you buy. There are a lot of other options for people who want to get onto the property market, whatever their age. Take a look at these ideas and who knows – in a few years time; you could be a successful property mogul!
It’s no secret that in the UK, the situation regarding the housing market is pretty bleak at the moment. Prices are soaring and depending on where you live, you may not get an awful lot of bang for your buck. That’s why it can sometimes be worth casting your gaze a little further and considering instead buying property overseas. Of course, this is not a decision to be taken lightly. As you are not going to be living near your property, you will need someone on the ground to take care of it for you and vet any prospective tenants (hiring a letting agent can sometimes be a good option here). The French and Spanish property markets have been popular with British investors for the past few years, so you may want to consider finding a house over there. Or, you could stay a little closer to home, and turn your attentions to somewhere such as Jersey, the Isle of Wight, or Ireland. The islands, in particular, are strong options for property investment, as house prices there remained pretty much the same throughout and after the financial crisis. Plus, these places are typically easier to get to from mainland UK, so if you did need to go over there for any reason, it wouldn’t cost you an arm and a leg.
Getting into buy-to-let
Purchasing a property with the intention of renting it out is a favorite cash cow for many people these days – even people who are just stepping onto their first rung of the property ladder. Buying to let can even offer you further flexibility, contrary to popular belief. For example, taking out your mortgage is going to be a costly thing, and could cause nearly all your personal funds to be depleted. You may choose to move back in with family to save money, while your tenants pay off the bulk of your mortgage for you – for those first few years, at least. Or, if you crave your independence, you could move into a rental property and use the money garnered from your tenants to pay off both your mortgage AND a portion of your rent – depending on how much you charge them. It is important that you consider the demographic of tenants you are willing to house in your property. For example, if you are looking for long-term tenants who will stay in the same place for a number of years, letting your home out to a young family or a married couple could be your best option. If you want greater flexibility – for example, if you want to move into the property yourself in a few years – you may be better off renting to a different kind of tenant. Buy to let student properties are readily available in University-focused towns and cities. So, if you have an influx of students arriving in your hometown every year, consider capitalizing on this and renting out your home to some of them. You will just need to bear in mind the differences in student rental periods from the rest of the housing market; in the UK, the time typically stretches from September to July.
Fancy trying your hand at property development? If you’re up for a bit of a challenge, buying an ’empty shell’ type property can bring about some serious benefits, providing you know what you’re doing with it. Look for a house that’s not completely beyond repair, but one that could also do with a bit of TLC. Remember, once the place is your’s, you have free rein over what you do with it, so don’t be afraid to convert the home into something you know future markets will love. For example, if you buy (or even inherit) a four-bed townhouse, why not consider splitting it up into two separate flats? Sure, this will take a LOT of remodeling, so you need to have some reliable contractors on your side. But it may also be the appropriate thing to do if the typical buyer has no need for such a huge/expensive property. You will also need to educate yourself on the best ways to add value to a dilapidated home. Focusing on the kitchen and the bathroom is a good starting point, as these are the most costly rooms to remodel. But adding space by converting the loft or basement, and showing some love to the garden, can also hold you in good stead with future potential buyers.