Fastest Way To Generate An Income Using Property Investment Strategies

The Fastest Way To Generate An Income Using Property Investment Strategies

Those who are looking to build their capital using property investment strategies may have heard before that it is not an investment for a ‘quick buck’. Whilst some investors enjoy renovating and flipping properties for an immediate profit, others like to keep their asset to receive an ongoing income. Properties will appreciate over the years, which means that a well-maintained property will increase in value with time, depending on the current market. There are also the benefits of receiving rent that investors like to use as a method of passive income. Taking all things into consideration, generally, holding on to a property will surely give you long-term income generation that may be worth more in the future.

But what about property investment strategies for generating an immediate income? What are the options for people looking to invest purely for an instantaneous return? What are the options for investing in a property and seeing your capital grow fast?

Firstly, there are two types of properties;

Off-plan – Undergoing construction. Off-plan developments have not been built yet, but they have planning permission to carry out construction. Usually these complete within a year or two.

Turn-key – Ready for immediate use. These developments are already built, undergoing some refurbishment for relaunch, or completely up-and-running.

Now, lets dig a little deeper. Here are the benefits of each, so you can decide which one can give you the fastest way to generate an income.

Should I Invest In Property Off-Plan?

Investing in property is already daunting for first-time investors. Off-plan investments are like unknown territory. As everyone knows not everything always goes to plan and that is one of the fears investors experience when they think of off-plan.

There are many cases, however, that an off-plan property does go to plan. With careful preparation, significant progress, and the right team a project can complete on time. I would be a lie if every off-plan project completed on the expected date, after all, you are building a whole development from scratch, but as long as communication is there investors can rest assured.

Key benefits of investing off-plan:

  1. The property will be brand new with modern facilities and rooms.
  2. There is an immediate capital appreciation of the land and development after the building is complete and operational.
  3. You won’t need to take out a mortgage because the full payment isn’t needed until the end of construction.
  4. You can stagger payments over the entire build period, so you don’t have to part with all your money at once. The money is also kept secure in escrow with additional interest on your deposit.
  5. Off-plan developments provide more housing in areas suffering from a housing shortage.
  6. You can get more than what you paid for it by the time it has been up-and-running. Usually, off-plan investments are below market value.

Key drawbacks of investing off-plan:

  1. Most lenders won’t offer a mortgage designed for off-plan properties.
  2. You may also need to re-apply for your mortgage if the completion date is longer than 6 months as the agreement may not be valid by that time.
  3. Mortgage sizes can also change if property prices change dramatically during the build.
  4. You will most likely have to buy in cash, possibly putting your deposit at risk.
  5. There may be delays in building. In extreme cases, the property’s construction may be put on hold.

Now that all the cards are on the table, you can use your own judgement to decide whether you want to invest off-plan. By the words of Christine Toner, you are essentially “investing in a vision”.

In terms of an immediate income, off-plan is probably not your best option. Although developers can arrange a gradual payment plan and give you up to 7% interest on the funds you deposit, you won’t make all your money back anytime soon.

Don’t fret! There is always another option…

Is Property Still A Good Investment If It’s Not Off-Plan?

Now that you know the differences between turn-key and off-plan, let’s go over the pros and cons of turn-key UK investment property.

Key benefits of investing turn-key:

  1. The property and its management have already been established for several years.
  2. There are already tenants occupying the property.
  3. It is a proven income generator, creating a secure investment.
  4. You will find it easier to get a mortgage than an off-plan property if it is a residential turn-key.
  5. You know that you won’t have to wait for anything to complete – there is no chance of construction delays.
  6. You know the actual value of the property because it is up-and-running.

Key drawbacks of investing turn-key:

  1. The price may be higher than off-plan because it is furnished and valuated at current market price.
  2. You will need all the money at once, usually after the 28-day period of exchange.
  3. You don’t have a say in the acquisition, property management or previous construction that took place.
  4. You are buying the property as is. What you see is what you get.
  5. You won’t get to be as hands-on with the property if you are an investor that enjoys renovating.

For those who want an immediate income generating investment, a turn-key property is the one of the best property investment strategies for this. As soon as the title deed is in your name, the rental income can start rolling in.

Our Turn-Key Property Investment Opportunities

The Bay Colwell, Isle of Wight

Our latest investment opportunity differs from the typical buy-to-let or student property. Our first ever furnished holiday let couldn’t be in a better location. Not only is this property mortgageable allowing you to invest with just £56,000, it is also a proven income generator with a defined exit plan.

Anchor House, Hull

This award-winning student development was extensively renovated and has now been running for 5 years with an unbeatable 100% occupancy rate.

Kingston-Upon-Hull is an area where there is a low supply of PBSA, making Anchor House a pioneer for purpose-built housing. This is also an investment with our lowest-entry price.

City Point, Liverpool

Liverpool is known for having a large population of students, even being named the fastest growing city centre population in the UK with a growth of 181% from 2002-2015.

City Point is made up of 159 en-suite student cluster rooms. Entering its 5th year of operation, this investment is established and proven averaging above 98% occupancy. The location is perfect, situated close to 3 of Liverpool’s top universities.

At Sterling Woodrow, we pride ourselves on helping new property investors get a solid start in the market and are happy to speak to you about your long-term goals and ambitions in care home property investment.

We also work with experienced investors to help them increase the value and profitability of their portfolios.

To book your complimentary property investment consultation with one of our senior portfolio managers simply click the button below and complete the short form and we will call you back at the appropriate time.