With over 20 years of experience as a property investor and landlord, I am often asked about the best places to invest in property. The answer is not as straightforward as people may think, but that is a good thing.
So, where is the best place to invest in property?
People typically ask this question to know which areas produce the best yields and capital growth. That’s fine, BUT the answers or locations they receive may not suit them for several reasons.
The world is a big place, and no particular area is suitable for everyone.
There are two factors that you should consider:
1. Location – relative to your approach as an investor
2. Time – depending on how busy you are with work
It’s also important to realise that a good investment property for me may not be good for you and vice versa.
Return on investment is based on how much capital you have tied up in the property, and the yields are based on the rental income and the purchase price. I have written an article to teach you how to calculate the Net Rental Yield and Return On Investment.
Let’s say we both view the same two properties at separate times.
Property One may be a better investment because you’re a better negotiator than me. I might be looking to pay £100,000 for it, and you might get the price down to £85,000, dramatically affecting the yield in your favour. That makes it a good investment for you but not necessarily for me.
I might see an opportunity with property number Two you don’t see. I buy it and add value, whether an extension, a change in the layout, or even a change of use through planning permission. I received a bigger return on investment and a higher yield despite your bargain on purchasing property number One.
Do you see where I’m going with this?
There are good investments everywhere, but they will take time to find, and there’ll be some legwork required.
Best Place to Invest in Property for You
To find the best area to invest in property for yourself, there are just two things that you need to consider.
Location for an Investment Property
The first thing you should do is think of location in terms of comfort.
If you’re looking to buy your first investment, you might want to buy near your home so you’ve got the comfort of knowing that you can get there quickly and easily if there’s a problem while you find your feet and learn the ropes as a property investor and landlord.
Because I used to move around with my work a lot in the Armed Forces, I bought my first investment property near family who had settled there.
It was a huge comfort to have peace of mind and know that it would be pretty easy for them to visit the property and help out if there was a problem.
Once I decided on the city, the estate agents told me which areas to look at. If I knew then what I know now, I’d have taken the time to contact some letting agents to get their opinion as well. But thankfully, it all worked out fine.
Location can also be determined by how hands-off you want to be as a property investor.
If you’re happy to take an armchair investment approach, the location won’t be so much of a concern. But you will still need to consider the next thing: how much time you have to visit the area, confirm your research and carry out property viewings.
How Much Time Do You Have?
You must know the area you’re considering investing in, and you’ll need time to do this.
You can start your research online and make a few phone calls, but I’d recommend visiting the area several times before considering purchasing there.
If you don’t have much time to travel long distances, I recommend investing near home or a territory near your home, say within a 30-60 minute drive. That’s because it will be easier and quicker to do your viewings and confirm your research.
You can also consider the town or city where you grew up or lived in the past. You will already have some knowledge of the area, and you may have family or friends there who can help out, similar to the position that I was in.
And hey, when you start shopping for a property, you may also be introduced to opportunities in the area through people you know.
As I’ve said before, don’t spend too much time chasing the best deal because there’ll always be better deals and people with more success than you. But that will likely be because they have more experience as a landlord and a property investor. It won’t just be down to the location.
Property Investing Hotspots
If you are experienced or confident, don’t have the time, and want to invest with a ‘hands-off’ approach, then you may want to focus your research on areas that have performed well in recent times.
However, the property market is full of cycles, and there is no guarantee that a specific area that has performed well in the recent past will perform well in the future.
It’s likely that the areas that have become recent hotspots will not be near you either, so you will need to work with a reputable letting agent who can manage the property and respond quickly to any questions the tenants may have.
Location and time are the two factors that will determine which areas will be best for you to invest in property.
Don’t get hung up on the best location in your country, especially when you’re starting. Look for a suitable place that’ll work and fit with you, and then look for a good property.
Like anything, you’ve got to be good at something before you can be great or the best at it.
Why Investing in Property Is a Wise Choice
Investing in property can be a smart financial move for several reasons.
First, real estate often appreciates in value over time, so buying property can lead to significant capital gains when you eventually sell. Even if markets are down in the short term, real estate values have historically increased over decades. This makes property investment a potentially lucrative long-term investment strategy.
Second, income from rent can make property investment profitable even before you sell the property. The rental income can offset your mortgage payments on the property and even generate positive monthly cash flow. As rental demand increases, you can also increase rents to generate higher returns.
Third, real estate provides diversification for your investment portfolio. Rather than just owning stocks and bonds, real estate acts as a hard asset that can balance the volatility of other investment classes. This diversification improves your risk management and increases the stability of your overall investment returns.
Fourth, you can use leverage to magnify your real estate returns through financing. Banks are willing to lend at favourable rates for real estate investment, allowing you only to provide a portion of the capital. This gives you a higher return on the capital you invest.
Finally, property investments tend to be hands-off if you u
tilise a property management company. This allows you to benefit from real estate returns without personally dealing with tenants or maintenance. Your only role is evaluating and financing the initial property purchase.
Real estate investing offers long-term appreciation potential, consistent cash flow, portfolio diversification, leverage for higher returns, and a hands-off investment approach.
For all these reasons, property investment is often a wise choice for savvy investors.
What Kind of Property Is Best to Invest In?
When considering the best kind of property to invest in, there are several factors to consider.
First and foremost, one should analyse the average property prices in the desired location. This will give an idea of the price range one can expect and whether it aligns with their budget.
Additionally, keeping an eye on property price trends and forecast growth can provide insight into potential returns on investment.
Furthermore, assessing the rental market in the area is crucial. Rental prices play a significant role in determining the profitability of an investment.
To maximise returns, investors should aim for rental properties with the best rental yields. High rental yields ensure a steady income stream and contribute to the property’s overall value.
Another consideration is finding affordable property in an area with high rental demand. This combination is ideal for investors looking to increase their rental property portfolio. Affordable properties enable entry into the market without excessive financial strain, while high rental demand ensures a consistent flow of potential tenants.
Ultimately, aiming for a balance between affordable property and high rental yields is the key to success in real estate investment.
It is worth noting that property values can fluctuate over time. Therefore, it is essential to keep a long-term perspective when investing.
Researching areas with potential for growth and appreciation can lead to substantial returns in the future. Stay ahead of market trends, analyse supply and demand factors, and monitor government infrastructure projects that can positively impact property prices. By doing so, an investor can make informed decisions and choose properties with the potential for long-term capital gains.
In summary, the best kind of property to invest in depends on various factors. These include the average property prices, property price growth, rental prices, and the rental market demand.
By seeking properties with the best rental yields and a balance between affordability and high rental demand, investors can position themselves for success. Always consider the long-term potential and keep up-to-date with market trends to make informed investment decisions.
If you are looking for the best place to invest your hard-earned money, property investment is the way to go.
Investing in property has proven time and again to be a smart choice for individuals seeking long-term financial success. With the current state of the property market and the continuous growth in property prices, now is the perfect time to invest in property.
The rental market is thriving, providing property investors with a steady stream of income and potential for high returns.
Whether you are an experienced property investor or just starting out, there are countless opportunities waiting for you in the property market. So take a leap of faith and embark on a prosperous journey in property investment.
With careful research and strategic decision-making, you can unlock the true potential of property investment and enjoy financial freedom in the long run. Don’t wait any longer – invest in property today and secure a brighter future for yourself.
I have also written an article to help you with your research for a good location once you have decided on a specific area.
And please make use of my property viewing checklist to reduce the risk of missing any crucial details on your property viewings.
Frequently Asked Questions
Q: What Is the Best Place to Invest in Property?
A: The best place to invest in property varies depending on several factors, such as rental yield, property market trends, and potential for capital growth. It is advisable to research areas in the UK that have shown promising growth, such as major UK cities with a strong rental market and high demand for residential properties.
Q: What Is the Rental Yield?
A: Rental yield is the percentage of income generated from a property compared to its value. It helps investors understand the potential return on their investment and is an essential factor to consider when deciding where to invest in property.
Q: How Can I Calculate Rental Yield?
A: Rental yield is calculated by dividing the annual rental income generated by a property by its total value. It is expressed as a percentage and is an important indicator of the return on investment for a buy-to-let property.
Q: What Are the Best Areas to Invest in the UK Property Market in 2023?
A: The best areas to invest in the UK property market in 2023 can vary, but some cities are known for their high rental yields and potential for capital growth. Consider cities like London, Manchester, Birmingham, Edinburgh, and Leeds, which have shown consistent demand for rental properties and have experienced strong property market performance.
Q: Should I Invest in UK Property in 2023?
A: Investing in UK property in 2023 can be a good opportunity, especially if you carefully research the market and identify areas with potential for growth. While past performance is not a guarantee of future success, the UK property market has historically been a strong and resilient investment option.
Q: What Are the Factors to Consider When Investing in UK Property?
A: When investing in UK property, it’s important to consider factors such as rental demand, rental yields, potential for capital growth, location, local amenities, transport links, and the overall economic and political stability of the area. Conduct thorough research and seek professional advice to make an informed investment decision.
Q: Which UK Cities Offer the Best Rental Yields?
A: Some UK cities are known for offering high rental yields, such as Liverpool, Nottingham, Cardiff, Glasgow, and Sheffield. These cities have seen strong growth in their rental markets and can provide attractive returns for property investors.
Q: Is 2023 a Good Time to Invest in UK Property?
A: While the future cannot be predicted with certainty, 2023 can be a good time to invest in UK property if you find areas with strong market fundamentals and growth potential. However, it is important to conduct thorough research, analyse trends, and consult with professionals to make an informed investment decision.
Q: What Are the Best Cities for Property Investment in the UK?
A: The best cities for property investment in the UK can vary depending on individual preferences and investment goals. However, cities like London, Manchester, Birmingham, Edinburgh, and Bristol are often considered as top choices due to their strong rental markets, high demand for housing, and potential for capital growth.
Q: What Is the Outlook for UK Property in 2023?
A: The outlook for UK property in 2023 is generally positive, with experts forecasting continued demand for rental properties and potential for capital growth. However, market conditions can vary in different regions and cities, so it’s important to research specific areas to make an informed investment decision.