Some of the challenges include:
- Market volatility. The real estate market is currently very volatile, and prices can fluctuate significantly. This can make it difficult to predict when is the best time to buy and sell properties.
- Rising interest rates. Interest rates are expected to continue to rise in the near future, which will make it more expensive to finance property purchases.
- Tenant issues. Dealing with tenants can be a challenge, especially if they are also struggling with rising costs.
Despite these challenges, there are still opportunities for property investors who are prepared to do their research and take calculated risks.
Yes, yield is key in rental property investing.
A higher yield indicates that the property will generate more income over time and offer a better return on one’s investment.
There are two main types of yield: gross yield and net yield. Gross yield is calculated by dividing the annual rent by the purchase price. Net yield is calculated by dividing the annual rent minus expenses by the purchase price.
There are a number of factors that can affect the yield of a property, including the location of the property, the condition of the property, the local demand, and the current market conditions.
Here are some tips for finding high-yield properties:
- Look for properties in areas with strong demand for rental housing.
- Consider properties that are in need of some repairs or renovations. These properties can often be purchased at a discount, and the repairs can increase the rental income.
- Be patient and willing to wait for the right property to come along. The best deals often take time to find.
Buying property at auction can be a great way to get a good deal on a property. However, it is important to do your research and be prepared before you start bidding.
Here are some tips for buying property at auction:
Do your research. Before you start bidding, it is important to do your research on the property you are interested in. This includes looking at the property’s condition, location, and the local demand for rented accommodation.
Have your finances in order. It is important to have your finances in order before you start bidding at auction. This includes having enough money for the deposit and the purchase price and any remedial works that may need to be carried out.
Re-leveraging is a viable option
One way to ensure you do have the necessary finances without taking on an even greater repayment burden is to consider re-leveraging your current housing stock.
Re-leveraging your portfolio can be a risky move, but it can also be a way to generate higher returns on your existing properties and also generate the necessary funds to increase your portfolio.
Before you decide to re-leverage your portfolio, it’s important to talk to a specialist financial adviser. They can help you understand the risks and potential rewards of re-leverage and make sure it’s the right decision for you.
A change of strategy
This might also be the opportune time to consider a change of strategy if your current investment strategy is not working for you. There are a few reasons why your strategy might not be working:
The market conditions have changed. The rental market is constantly changing, and an area with once a high demand, may soon become saturated with available properties which would impact on the rental returns you could expect. Conversely, demand might outstrip supply in a region beyond your normal sphere of operation. Here again a specialist adviser would be able to direct your focus to new areas of interest,
One major development in the property market has been the change in regulations making it easier change the use of commercial premises into residential dwellings. A steady decline in our town centres and, more recently, a move for more people to work from home, has resulted in more high street businesses and office buildings entering the property market.
Such properties offer an golden opportunity for landlords to seriously change their investment strategy. Paul Elliott, Managing Director of Propp, the specialist finance comparison site said “We’re seeing clients pick up disused commercial property on highstreets to convert the upper floors into multiple flats. This is a great way to manage cashflow and grow your portfolio quickly, as you can sell one flat to release equity for your next project, while retaining the other for rent.”