Choosing the best investment strategy for you is something than often gets overlooked. This is particularly true for investors who are new to property and are not sure what they are doing. For those investors, let us help you with the following.
What is a Buy-To-Let?
A Buy-To-Let property investment is an investment where you purchase a property and then rent it out to a tenant, typically on an Assured Short hold Tenancy (AST) contract. These types of investments are the bread and butter of any property investors portfolio and they are legacy builders and are typically a common exit strategy too. Although these types of investments usually have the lowest cash flow (in South Wales you can expect a net cash flow of at least £200 on a good investment), they are also one of the lowest risk and you can leverage almost all of the work by using a lettings agent to deal with most things, making the investment very hands off.
What is (SA) Serviced Accommodation?
Serviced accommodation is where, instead of having long term tenants (like with a buy to let), you have short term guests who are able to use your properties facilities and stay the night, albeit on a typically shorter term basis. Simply said, your property will be more of a hotel than anything as you will advertise the property, where it is per room or for the entire house, to have short term guests pay for their stay. Serviced Accommodation typically gives you much higher cash flow than a standard buy-t-let, but there is a lot more work involved (it is highly recommended that you leverage as SA management company, which we also provide).
What is (HMO) House In Multiple Occupation?
A HMO property is one where you will have multiple rooms (typically 4 or more) and have each room rented out individually. This strategy can often, should your location and other particulars be ideal, be a great cash flowing strategy. HMO’s do often require a lot of work so be mindful to utilise leverage and ideally have a HMO management company in place to take most of the hassle and stress away. Much like an SA, it can give fantastic cash flow and should definitely be considered once you have your basic foundation of buy-to-let properties, once you have grown your portfolio.