Solving the Property Investment Puzzle

Fitting Together the Pieces of the Property Puzzle

With all the different opinions on property investment, house prices, inflation, recession, and what’s going to happen with the property market, it makes it difficult to work out a viable strategy to profit from property investment.

Even though house prices may be falling in most regions, the rise in rents since April has kept many landlords in the game - and in profit - particularly since the rise in rents has helped increase their gross yields.

RICS spokesperson James Scott-Lee said:

“The lettings market is booming with many vendors opting to rent their property while sales in the housing market continue to dry up… Becoming a landlord is now an increasingly profitable option with rising rents and yields offering good returns.”

It seems that established and savvy investors have been reaping the benefits of the housing downturn for some time now, and will probably continue to do so.

But there are still quite a few hurdles to cross, before you can be certain of turning a profit in these uncertain times. Many people may be reluctant to enter the market right now, which could be a blessing for those with the foresight to profit from property, buying low and either renting or simply waiting for the markets to turn once again.

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Students Still a Good Bet?

There are certain areas that tend to remain buoyant, despite other market forces at work. These are cities where a lot of re-generation is taking place, and top student and university towns. As far as property investment from rentals, it seems that places such as Nottingham, Durham, Bangor, Manchester & Hull remain well above average, with yields far better than other areas of the country.

Although many investors may think that this is a weak property market at the moment, research is showing rental yields are on the up, and buy-to-let investors have an interesting opportunity to take advantage of the increasing demand for student accommodation, whilst capitalising on the lower house prices.

As Nick Clark, Managing Director of the Property Investor Show said recently:

“There will always be a sustained demand for properties which will produce a far greater annual rental yield than the average buy-to let property. In fact, it could be as much as six to seven per cent more.”

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