Are you considering investing in property but don’t know where to begin and what type of property investment you would best benefit from? An Independent property valuer, that specializes in property including residential, commercial, or vacant land, the three property investment types, can help determine your requirements for investment and what you would like to gain in the future of your investment.
No matter the investment, there and pros and cons that you would need to take into consideration.
It has been strongly recommended that residential property be your initial type of investment, with a residential portfolio will not only provide rental stability but offer you the best market growth in the coming years.
Here is a breakdown of three different types of properties as they may be of interest to you in the future of investments.
1. Residential Property
The most popular of properties investment in Birmingham, encompasses the idea of homes, apartments, townhouses, holiday homes or any type of property that has been designed to be lived in. As mentioned, residential property is a primary form of wealth and is the best in market development growth, and provides the best rental stability.
Residential property will increase in value as the years go by, whether you live in the property for a certain period and decide to renovate for the purpose of selling or renting the property for additional income. You will be adding value to the property and in turn, increase your profit from the investment.
Keep in mind the location of the property you would like to purchase is important. Especially if you decide to rent the property for income purposes, potential tenants look at all external factors such as location, proximity to shops/ schools. These are factors to consider, do your research of the area you’re interested in purchasing to determine whether it’s an area of potential to grow or not.
2. Commercial Property
Is the property that relates to business operations such as, offices, retail and industrial (factories) facilities. Depending on your knowledge and whether you are interested in investing in commercial, whether you are purchasing a ready established business or starting a new company. Understanding what aspects to take into consideration and how to best grow your position within the industry is vital to succeeding as well as increasing the value of the business.
The main advantage of commercial property is that they can be found easily if once tenanted and the property has the potential to continue to grow and increase in cash flow.
As commercial properties are structured differently to residential keep in mind that you have a responsibility to maintain the property whether commercial or residential, but when you purchase a commercial space, the space is a vacant shell, how you see the business depends on your additions/ “fit-outs” that you would add to get your business started.
But this simply means if you are a tenant then you’d have to bring the property back to its original state of a vacant shell at the time of sale or end of the lease.
A disadvantage of commercial investment properties, especially if this is your first time owning a business is understanding that the industry is unstable, if you are leasing your property make sure you do your research and take a good look at the finances of the potential tenants.
And be aware that start-ups of new businesses may have a higher rate of failure. As the commercial property is valued predominantly on its rental yield. If interest rates rise, the demand for property decreases, and this can have a negative effect on the value of the business.
Commercial property investment is a higher risk than residential, consider all the factors as it is important to minimize risk when building your business strategy.
3. Vacant Land
Requires a lot of skill and knowledge if you wish to succeed, as vacant land is in the name itself there is nothing but land, so there is no rental income coming in unless you have decided to use the land as farmland as a primary purpose of producing products/services. And even then, this will take a lot of knowledge and understanding of the industry.
Although you might see investing inland as a big score to one day establish a development on it. what you need to remember is there are factors and risks with every step, the specific knowledge required to succeed leaves no room for error.
You can still build a strong portfolio of investment if you decide to purchase land and home packages for a residential investment purpose. So, you can purpose the land of your choice and then develop the house of your dreams.
Investment Property is the best source of income, where you decide to place that investment, all depends on your financial capabilities as well as what you would like to gain from the investment in the long run.
As mentioned previously, the residential property would be a strong, reliable source of income for investment purposes if you are starting out and decided you wanted to invest. We recommend getting in contact with an independent senior valuer, who can set you on the right path of what investment would best benefit you in the future.
Our expert valuation teams have over 20 years of experience in specified fields of residential, commercial, and industrial. Learn more about the type of services we offer to get you started on your journey of property investments.
Henry Rivers – LinkedIn Profile
Henry Rivers is one of our top leading valuers, both registered and certified with the Australian property institute (API), with upwards of 20 years of experience working in the Canberra property market. Henry’s expertise spans across all property types and purposes e.g. residential, commercial, and industrial property.
- About the Author
Alex Grigoryan is a Professional Home Improvement and Lifestyle Writer. He has been in the industry for over 6 years and has been writing for Chique Home Living since 2019. His work has been featured in prestigious blogs such as Spruce Home, Better Homes & Garden, and more.