Buy to let apartments beat houses as best UK property investments
If you’re thinking about getting into buy-to-let property, you might be wondering whether it’s more beneficial to invest in a house or an apartment. Well, here’s a shedload of reasons why you should vouch for the latter.
It’s no surprise that apartments offer lower entry prices than houses. Units are of a much smaller scale in comparison to even 1-bedroom homes, and this factor of size alone is what makes apartments available at significantly lower costs. With many flats being built from scratch to combat the surging demand, high quality apartments boasting a modern design can be acquired for two thirds of the cost of a house!
When it comes to buy to let investments in flats, investors are presented with the opportunity to buy more apartments in efforts to build up a varied portfolio. There is also the added bonus of bigger discounts which can be applied when purchasing apartment properties in bulk.
Prices may be easier to swallow on apartment units; however, their cost is slowly inflating in the current UK property market. City centre zones are particularly vulnerable, as high demand for urban living and a lack of supply are driving property prices up.
This doesn’t have to be bad news for investors though, as it hints at plenty of room for capital growth. As the cost of property creeps up over time, investors can look forward to higher valued units in the future and a maximum potential for capital appreciation upon resell of the property.
Another advantage stemming from lower costing apartment properties is that stamp duty and other taxes won’t be as steep. Higher costing houses means properties will fall into the top bandings for stamp duty and landlords will thus be liable to pay higher percentage rates which have recently increased in line with new government policy.
Despite lower prices, flats and apartments are still well-known for producing high rental yields. Just because you’re paying less money for an apartment, doesn’t mean you have to miss out on excellent returns on your investment. In some UK locations, returns as high as 12% can be obtained on buy to let flats!
The potential for yields is so great that international investors from overseas are flooding to the UK market. Keen to get involved in this high performing sector, investors are aware that UK apartments and flats outperform what’s available in other markets across rival nations.
Lifestyle trends pointing towards renting flats is just one of the advantages of apartment investments. The newly coined ‘generation rent’ points towards a healthy future for rental property and rental apartments in particular with young people expected to be renting for most of their lives.
Rising house prices is making it more difficult for young people to get a food on the property ladder, and thus investors in apartments in key locations are lapping up all of the extra tenants seeking accommodation.
Many youthful professionals, students, singletons and couples are heading to trendy UK city centres in search of stylish apartments, and they make for ideal tenants. Student and residential flats designed with these tenants in mind can be accessed at RWinvest where an entire portfolio is dedicated to satisfying both tenant and investor demand. The nature of these reliable residents means investors can expect low void periods from their properties.
Yet another benefit of investing in apartments is the fact that the maintenance of the unit and entire development building is usually managed by an external company. There is no need for landlords to have to oversee large houses and gardens that require constant work when investing in hassle-free individual units with an experienced management firm.
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