The property market in Europe is falling and even if some places the prices have risen a bit, the rate of change is negligible. So are you worried that you would never be able to make money from property? The answer is no. There is still lot of scope where one can make money from property by the way of capital appreciation or by earning from a good rental income. The secret is in finding the right way to invest.
Before the financial slowdown, house prices were on fire so it was very easy to make a quick buck by either selling a property or by investing in one.
What kind of investment should you make?
There are areas which are showing signs of growth and have recorded a growth in the range of 9 percent to 24 percent over the last year. The luxury real estate in the United Kingdom has slowed down recently, but there is still enough opportunity of getting returns from the real estate market in the lower segment. This is because the demand for reasonable, affordable housing is still pretty high. Either people are downgrading from their luxury apartments to smaller apartments or more people are looking for apartments as they are relocating into newer areas because of job opportunities.
Some of the places in the United Kingdom where there is good scope of capital appreciation are:
- Tower Hamlets
- Waltham Forest
- Greater Birmingham
All the above places have reported double digit gains in their property prices. So, you could invest in an apartment in one of these places if you wish to get a capital appreciation or you could also put the apartment for rent and get a good rental income annually. The rental rates in these localities/neighbourhoods are also very good, so you can actually still make money.
Looking at the Future Growth Prospects
- One more factor that could ensure that you get good returns from your property is if you invest in a locality which has enough growth prospects. Upcoming transportation projects or MNC tech parks, foreign investments or universities or schools would ensure a rush of people into these areas. These people would require accommodation for living, which would inevitably shoot the demand for property up (ownership or rental).
- You should also have a clear understanding of how you want to make money, by capital appreciation or from a steady rental income. There are some localities which attract renters, such as college going students or fresh graduates or young executives. Also, there are some areas which attract only people who are ready to buy for ownership. If you want none of them, you could buy a property simply as an investment and later sell it off to gain from a good capital appreciation.
Planning the Long Term Way
One more way when you can make the stagnating or declining property market to work positively for you is very easy. Buy cheap and sell expensive. The prices are low now, but they would become high over a period of time. Just as every economy works, every market also works in cycles of high and low. So, if you do have the appetite to invest over a long term it would be wiser to wait and then sell off when the market is booming. Also, in a stagnating market, getting financing facilities would be much easier. Loans would be easily available, and the best part is you could simply shed off a few numbers from the interest rate by deciding to re-mortgage of your own property. You might get a mortgage interest rate as low as 2 or 3 percent. This way you can easily make money by saving some money that you pay as monthly interest.
Making money is all about having a clear strategy and meticulous execution of the strategy. Some people who do not have that are unsuccessful in making money even when the markets are booming and some people are able to make money even when the market has stagnated. You have to have your strategy in place. With your strategy clear, making money out of the property market is still possible.