With banks still offering very low interest rates for savers, the returns on this traditional savings route remain poor and don’t really offer a realistic income. This may improve but it is likely to be over the long term so high yield property investment offers an alternative method for income generation.
With a low interest environment, although this hurts savers, it has the opposite effect on mortgages as these are kept low, meaning the buy-to-let market remains viable. There are currently in the region of 2.5 million landlords in the UK, so it is a well recognised income generation method.
Headline grabbing investments such as vintage wine, classic cars and overseas forests all seem to offer great rewards but are far more risky and are really only suited to the specialist investor.
Armchair investments relates to a style of “hands off” investment where overseas or UK based investors prefer to invest in property but don’t wish to get involved in the detail of the rental property or managing the tenants. In this case an agent will act on their behalf and take a small percentage of the overall rental income to find tenants and manage the property on behalf of the investor.
The rental market is very much in the news as recent reports suggest a high percentage of younger people will rent for most or all of their lives, rather than becoming property owners. The market also caters for short term occupants who only need a place to live for a few months; students who will rent for one or more academic years before moving on; young professionals who may move city relatively often as they are yet to be settled in any one area; low-income groups and retired people who are looking for smaller properties or those with community facilities.
Rentals are also split primarily between single “family” style properties where several people live and share a location together and pay a single monthly bill, often described as Residential lets or the property is an HMO style where each person has their own bill to pay but there are shared facilities such as bathrooms and a kitchen.
HMO Property Investments
Our speciality is in creating portfolios based on HMO properties targeted at students and professionals. We have been successfully doing this for the last decade and now manage over 1300 tenants across the North West. As a buy-to-let investment specialist our combined net cash yields are up to 13% (rental and capital growth).