Property finance platform HiP has released key insights and their expert opinion into what to consider when thinking about real estate investments – focusing around helping owners and investors in a number of ways. HiP tips focus on helping investors identifying the key opportunities to balance the various return options for successful property investments.

Almost unaffected by other markets, property offers the potential to generate returns. Because of this, investors can tailor their specific risk and return targets and make investments both into lower risk income, generating investments, and higher risk projects that add value to the property in question.

Profits through renting

As lower risk investments typically rely more on strong rental prospects, a good way to identify those opportunities are where prices are low, or have fallen, but are relatively close to populated areas – especially those with leisure activities and job markets with a good annual income level, or established universities.

Areas of Liverpool and Newcastle upon Tyne are example where property prices are at approximately half of national average but offer some of the most attractive rental returns of around 10%.

Look for profitable areas and development opportunities

While it is common and intuitive to invest in properties in areas with established strong price performance, this can be subject to getting the timing right. It is key is to evaluate what will drive further price increase, or if future returns are instead likely to get lower. Catching opportunities early on can make a huge difference to an investment, compared to following known trends that have already been tested.

Property markets tend to repeat previous patterns and identifying price changes and the rate early on can lead to very profitable investments. Edinburgh, Manchester and Birmingham are all markets that experienced strong growth in 2017 and continue to perform stronger than the national average.

Closely related are opportunities created by changes such as new or improved infrastructure. This is a major driver for price growth, as it often increases the draw and comforts of an area. The full benefits can usually be seen after the changes take place and as the project is completed. Improvements can have a positive impact on demand in the area for the long term. This applies equally to large infrastructure projects of national scale or regional scale, such as Crossrail, or local projects such as new schools or parks.  

Value Add Investments Everywhere, Buying Right is Key

Another type of attractive investment opportunity are generally those that add value to a property, from larger scale redevelopments to smaller refurbishments. Not only can a redevelopment enhance the size of a property, but it can also improve the technical standard. This is an ongoing feature of the property market, as all houses need to be maintained and improved over time – irrespective of general house price trends.

The key to successful value adding opportunities is clearly to buy at the right price. This will allow for mistakes and unforeseen costs in the project. Although a somewhat higher risk investment, it can be very profitable in the long-run, especially if one is able to combine this with the general quickening market conditions.