When you think of property investments, your mind may automatically take you to residential investments, where investors may buy or construct new houses, apartments, or dwellings for the purpose of living, or renting them out to others.
There’s a lot to consider when investing in residential property, as the right property can harness a bigger revenue. Where the property is situated, how old the property is and how much work is required to make it a desirable investment all play a big part in how you will choose to invest. Once you’ve found the right property, however, you’ll find that being a landlord can yield some big profits and can be financially rewarding.
If that wasn’t incentive enough, we’ve collated a list of reasons why residential property investments can be the right move for you.
Cash Flow
To put it simply, if the rent you charge your tenants exceeds the cash going out of the property, then you’ve got yourself a positive cash flow. While the property outgoings can seem excessive on paper, with debt service, repairs, insurance, real estate taxes, capital improvements, maintenance, utilities, association fees, and management fees, the cash you receive from your investments should cover this, and leave you a little extra profit each month.
Historically sound investment
Historically, residential properties have performed well and steadily continue to do so. In 1980, the average price of a home in the UK was £22,680. By summer 2021 this year, this figure had risen to £250,000. As a result of this, this offers the investor capital appreciation for when you do eventually sell, and until you sell, you will receive an annual income from your rental payments.
Borrowing Power
As your portfolio grows, so does your collateral. With real estate investing, you can use the debt to increase your ability to purchase other properties. Leveraging properties is commonplace when investing, and can be done to purchase your next investment.
Increased investment
Those property outgoings we discussed earlier? Well they include the principal portion of the monthly mortgage payment, should you have one against your investment. This amount is not truly an expense of the rental property, since it builds equity in the investment.
When investing in real estate, the dream is that markets will flourish and the fair value of your property will grow. To capitalise on that appreciation, you will need to sell the property, so ensuring this is done at the opportune time is key.
If you’re investing in a property for it to become a part of your portfolio, you’ll want to ensure that it is as diverse as possible. Real estate has a low correlation with other major types of investment classes, which can mean that the addition of real estate can reduce the risk of your portfolio and provide a higher return.
How can JRR help?
JRR Capital Investments have a long standing track-record of residential investment and are able to draw upon our wealth of experience, in identifying the right opportunities for our investors.
There are opportunities for both individuals or companies seeking to expand or invest in the buy-to-let portfolio. We can also help you get invested in the market at the earliest, and smartest opportunity. This will help you stay ahead and allow you to invest at the optimal time.
If you’re interested in using our services, then please feel free to contact us.
