Making money in property with top investment strategies

24th September 2021

By Will Leyland

Ultimately, when we’re looking to invest in property, we’re here to make money, right?

When we stop to consider some of the best ways to invest our money is to be able to generate an easy return without having to exert tons of effort in the same way as working a job, there can be little doubt that UK property offers one of the safest and strongest returns out there.

The media, as you’ll likely know, is always full of success stories of landlords that purchased their first properties only to then go on to be millionaires within a few years.

There is also, however, something of a preconceived idea that the best way to make big money from investment is via the stock market. It’s certainly true that almost anybody can now make good money on the stock market, but the risks can be enormous for those that aren’t sure of what they’re doing.

The research and understanding to make money from the stock market is huge in comparison to property, where things are fairly straight forward.

Here, we’re going to compare two stock investment strategies and how they can be applied to property to make yourself wealthy.

Value Investing

According to Investopedia, value investing consists of bargain hunting. To put it in their own words – “They seek stocks they believe are undervalued. They look for stocks with prices they believe don’t fully reflect the intrinsic value of the security. Value investing is predicated, in part, on the idea that some degree of irrationality exists in the market. This irrationality, in theory, presents opportunities”

How can we apply this to property? Simply put, you’re looking for property investment opportunities in areas that are looking to go through sustained growth, but have not yet been noticed by mainstream property buyers.

In this example, we might consider areas around the Greater Manchester region as value regions, as well as other areas in the Northern Powerhouse regions such as Liverpool, Newcastle and the North East more generally.

These are areas that are experiencing quick and sustained growth, but that are still relatively cheap entry price areas, certainly for off-plan property. Value investing here could be imagined as investing in these areas in the knowledge that the entry price doesn’t reflect the true intrinsic value, a value that’s set to increase markedly.

Momentum Investment

According to Investopedia, this is a strategy that involved finding the wave and riding it whilst the market is hot.

In their own words – ‘Momentum investors ride the wave. They believe winners keep winning and losers keep losing. They look to buy stocks experiencing an uptrend.’

With that in mind, it could be considered the momentum strategy for property investors to look towards already bustling and hot markets in city centres such as Manchester, Liverpool and Leeds where prices have been rocketing for some time and where it’s expected they’ll continue to rise.

Of course, the difference here (and certainly with off-plan) is that the entry price is much higher, however, simple maths will tell you that a higher asset value will increase in total value quicker.

If you’re buying a £500k apartment in the city centre which grows by 10%, you’ll have a £550k apartment by the next year, as opposed to the same equation with a £100k apartment in a growth area.

When it comes down to it, it’s all about deciding which of these methods is right for you – and whichever method it is, we can help. We are pioneers in providing high yielding, fully managed properties designed for both tenants to live in and investors to own.

Whether you have a query about a specific development or are looking for more general information about Knight Knox or the buy-to-let process, feel free to get in touch today!

Did you find this article helpful?

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Making money in property with top investment strategies

24 September 2021

Ultimately, when we’re looking to invest in property, we’re here to make money, right?

When we stop to consider some of the best ways to invest our money is to be able to generate an easy return without having to exert tons of effort in the same way as working a job, there can be little doubt that UK property offers one of the safest and strongest returns out there.

The media, as you’ll likely know, is always full of success stories of landlords that purchased their first properties only to then go on to be millionaires within a few years.

There is also, however, something of a preconceived idea that the best way to make big money from investment is via the stock market. It’s certainly true that almost anybody can now make good money on the stock market, but the risks can be enormous for those that aren’t sure of what they’re doing.

The research and understanding to make money from the stock market is huge in comparison to property, where things are fairly straight forward.

Here, we’re going to compare two stock investment strategies and how they can be applied to property to make yourself wealthy.

Value Investing

According to Investopedia, value investing consists of bargain hunting. To put it in their own words – “They seek stocks they believe are undervalued. They look for stocks with prices they believe don’t fully reflect the intrinsic value of the security. Value investing is predicated, in part, on the idea that some degree of irrationality exists in the market. This irrationality, in theory, presents opportunities”

How can we apply this to property? Simply put, you’re looking for property investment opportunities in areas that are looking to go through sustained growth, but have not yet been noticed by mainstream property buyers.

In this example, we might consider areas around the Greater Manchester region as value regions, as well as other areas in the Northern Powerhouse regions such as Liverpool, Newcastle and the North East more generally.

These are areas that are experiencing quick and sustained growth, but that are still relatively cheap entry price areas, certainly for off-plan property. Value investing here could be imagined as investing in these areas in the knowledge that the entry price doesn’t reflect the true intrinsic value, a value that’s set to increase markedly.

Momentum Investment

According to Investopedia, this is a strategy that involved finding the wave and riding it whilst the market is hot.

In their own words – ‘Momentum investors ride the wave. They believe winners keep winning and losers keep losing. They look to buy stocks experiencing an uptrend.’

With that in mind, it could be considered the momentum strategy for property investors to look towards already bustling and hot markets in city centres such as Manchester, Liverpool and Leeds where prices have been rocketing for some time and where it’s expected they’ll continue to rise.

Of course, the difference here (and certainly with off-plan) is that the entry price is much higher, however, simple maths will tell you that a higher asset value will increase in total value quicker.

If you’re buying a £500k apartment in the city centre which grows by 10%, you’ll have a £550k apartment by the next year, as opposed to the same equation with a £100k apartment in a growth area.

When it comes down to it, it’s all about deciding which of these methods is right for you – and whichever method it is, we can help. We are pioneers in providing high yielding, fully managed properties designed for both tenants to live in and investors to own.

Whether you have a query about a specific development or are looking for more general information about Knight Knox or the buy-to-let process, feel free to get in touch today!

Will Leyland

Did you find this article helpful?


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