Is there a clear winner when it comes to selecting an investment property? Does data indicate one property size is likely to outperform the other?
With property investment is high demand, there are factors to consider when planning an investment in property. Choosing the number of bedroom that you would like the property have is a great starting point.
The question remains; which property types and sizes tend to perform better than others?
Generally speaking, an investor that is seeking property investments for the longer term will be searching for properties with strong potential for capital growth. It is suggested that houses offer more stable returns rather than apartments, simply because the land value of a house will add to the capital growth over the duration of holding the investment. Also a house allows for value to be added via renovations and extensions.
If searching for an apartment, it is often best to buy in inner city areas as they tend to yield the best when it comes to capital growth. With so much transport and entertainment surrounding the property it is often where people want to live and thus property prices increase with time. In this scenario you will likely find that professional singles and couples are your target audience and one or two bedroom apartments will be attractive to them.
When buying property for income, rental yield is always the priority. You are aiming to find the happy median between the costs of financing the deal and the premium you are able to achieve when renting the property out. Low costs vs high rental income is the aim.
Rental potential makes up just one part of the equation, having a steady demand from prospective tenants willing to pay the market rate for renting your individual property is vital. You must take time to analyse the demographics of where such property is located and what are the prospects of achieving said goal.
If you find yourself in an area that has many young families flocking to the area. You would find that two to three bedroom houses with a garden would be easy to rent out.
FJP Investment is a team of investment specialists sourcing a wide range of investment opportunities both in the UK and overseas. Products include the recently launched Bar Works investment.