When it comes to investing in property one can get pretty confused, what with options to invest in residential, commercial and the ever growing student property, which probably yields the highest returns. However, each segment has its own advantages and disadvantages, so let’s take a closer look and try to find out which type of property gets the best return on investment (ROI).
There is no doubt that investing in residential property is highly secure, and it is possible to earn handsome returns over a long term. U.K. is still one of the leading property markets in the world. Reports released by the Office of National Statistics (ONS) indicate that residential property prices rose by a good 7.2% by the end of 2016. The buy to let market is buoyant and one will certainly enjoy many advantages investing in residential property in the U.K. There is a perpetual lack of housing in the country, and buy-to-let investors are lapping up property like never before. There is a shortfall of close to a million homes, and developers are busy developing new neighbourhoods at a furious pace.
Gone are the days when commercial property was in the hands of a few big players in the property market. Today, individual investors can aspire to become commercial property owners. To be precise, they can own a segment of a large property worth millions of pounds. High-spec office suites located in busy commercial areas are ripe for the plucking. You have options of letting your share of the property on either a short lease or a long lease. It is more like buy it, let it out, and forget it for a while. The property keeps earning decent returns, and you can add the increment clause while drawing up the rental agreement and seal the deal to your advantage. There are hardly any hassles in letting out commercial spaces as business houses spell the least trouble as tenants.
The best in the pick is probably student property, what with thousands of students converging from all over the country to earn their degrees; student accommodation is always at a premium. It’s not just the domestic students; there is a huge chunk of foreign students coming in hordes to get the coveted degree from any of the several colleges in the U.K. Surveys indicate that there could be a 10% increase in international students making a beeline to Britain in the next decade or so. Student accommodation enjoys a high occupancy rate, with rental returns on the higher side when compared to other residential and commercial property. Your best bet yet is to invest in some good student property and earn handsome rental returns.