Property investment is when you purchase a piece of real estate, with the intention of selling it on to gain a return. Certain investments are also used to generate regular income through rental fees.
If you get it right, you can potentially make money from property investment, without sacrificing heaps of time and energy (which is one reason why busy entrepreneurs are often drawn to it).
So, how do you get it right? Like most things, it starts with understanding the basics …
Should I invest in property?
In the past, property investment was a pool party reserved for “high rollers”.
You needed a pile of free cash, and a network of connections, just to get invited.
Today, there are more unique ways to dive in, or dip your toes, including the Cogress investment model (which we’ll get onto soon).
First, it’s important to ask yourself why you’re considering property investment.
Are you looking to get rich this year? Or have you got your eyes on retiring in comfort further down the line?
Although it has been known for new investors to make a splash on their first speculative venture, it is better advised to minimise the risk of drowning, focus on the end-goal, and take a steady approach towards completing it over a longer period of time.
That means don’t close your eyes and lump all your life savings on one expensive “get-rich-quick” investment.
On the other end of the scale, you need to decide if you have the intestinal fortitude for putting your own money on the line.
There is always a chance of losing money in property investment. The water’s always going to be cold the first time you step in.
But once you’re over that, the exciting part begins and you can choose what type of property investment to focus on.
What are the different types of property investment?
There are two main types of property investment:
- Buying to sell at a higher price
- Buying to generate regular income through rental fees
Traditionally, they both have their pros and cons. Most successful investors strive for a mix of both – to complement each other.
For example, if you purchased a property with the intention of selling it for higher value within 18 months, you could use the capital gained to pay off the mortgage of a second property, which you’re using to supplement your monthly income thanks to a tenant paying rent.
It’s not easy to find these perfect blends – let alone manage them effectively (after all, you have things like maintenance costs to consider).
And like we mentioned earlier, the golden opportunities are often reserved for larger investors.
That’s where Cogress comes in …
Is this alternative property investment model right for me?
When you join Cogress (it’s free), you unlock the opportunity to take just a fraction of the equity needed for various investment properties across the UK.
For example, you only need to invest £20,000 in a property that could be worth millions, as the rest of the equity is raised by the other members of Cogress (people like yourself looking to build a portfolio without committing huge fortunes).
You select the opportunity that’s right for you. Your money is invested directly in the property itself. But you don’t have the hassle of managing the property (i.e. liaising with the developer or handling maintenance costs).
Instead, you have a dedicated Investor Relations Manager to rely on for support throughout the entire process (meaning you can be hands-off if you want to). And you can always access your Cogress portal to check real-time information.
It’s an efficient way to spread your budget across multiple projects, which would otherwise be inaccessible.
The best part is that we rigorously vet the opportunities for you. We’ve got our money (and reputation) on the line, too. So, you can rest assured that every property in our investment portfolio is already qualified to our standards.
It’s your job to decide if it’s right for you.
For now, let’s take a look at the basic approach for choosing an investment property …
How do I choose the right investment property?
The best investors strive to seek the best possible informational advantage before making a decision.
When it comes to property, there’s a lot of things to consider. For example, what’s the price? Is that fair in comparison to similar properties in the area? What are the possible ongoing costs? What’s the exit strategy? How hands on do I need to be? Has the property sold at an increased value in the past (for older buildings)? What types of investment property are you looking at? Are these property types easy to sell? Are house prices expected to rise in this area within my ideal exit timeframe? Are rental prices significant enough in this area to be highly profitable, yet low enough to minimise attrition between tenancies? What are the tax implications I need to consider?
This is just handful of the questions to cross off your property investment checklist.
Even if you’re buying property to sell, with no intention of leasing out to tenants, your buyer may be looking to add it to their portfolio as a landlord. So, it can be useful to research rental fees in the area.
In fact, it’s we think you need to study the area in great detail – not just the property itself. The good news is that we can do the legwork for you. Our Area Guides break down all the information you need on especially interesting locations for property investment in the UK.
But it doesn’t stop there. If you’re looking at a new property and investing in it “off-plan” (before it’s built), then you need to know you can trust the developer.
Again, Cogress can help you out here as it’s our job to screen each developer and handle the relationship on your behalf.
While you’re here, sign up for free and get a taste for what it’s like to become part of our community of investors who gain the informational advantage through our exclusive Cogress membership insights (it takes seconds to join and there’s no need to commit any money forward whatsoever).
If you’d prefer to speak to one of our team first (most people do), then call us on +44 (020) 7100 9744. Don’t worry, we won’t push you into anything. We’re simply here to help as we try to build our community.
Over to you …
There’s a reason why you’re researching property investment.
It’s rare for people to stumble into it.
Something drove you to educate yourself on the basics (and hopefully we’ve done a satisfying job for you so far).
It is not for everyone.
The dreams of early retirement do come true. Just as the nightmares of losing money are real, too.
Note: This is important. Your capital is at risk when you invest, in anything. You may lose every penny you spend. Past performances do not guarantee future results in any way. If you’re worried you can’t make a decision alone, consult an independent financial advisor beforehand. Read our full risk warning for more.
The key is to approach it in a smart way. Seek the informational advantage at all times. And trust your instincts.
Say you’re looking at a property that’s going to keep you up all night, worrying about it exiting at a higher value… run a mile.
But say you’re looking at a property that ticks all the boxes. And you feel good. Can you give yourself permission to spend money on it?
If the answer is “yes”, then don’t let this be the only article you read on property investment.
Surround yourself with like-minded people by joining an investor’s community. And, of course, if our business model resonates with you, we’d love to have you on-board.
Take the first step and sign-up. Again, there’s no cost to you whatsoever for joining.