Property investment has established itself as a greatly beneficial way to maintain financial security.  Bricks and mortar is not a one-sided approach and what works for some people may not work for others.

Andy Foote, Director at Sevencapital, argues that holding many forms of investment is often the best way to secure financial success. Providing you are well informed about each kind of strategy is vital. He suggests that with property investment you should research every investment strategy and narrow it down to your two favourites.

You should know what your motivation is when purchasing an investment property. That may be steady cashflow, capital appreciation or both. You will need to have a vague idea on what kind of return you are expecting to make on your investment in order to succeed in your chosen venture.

You should also have a timescale in your mind. Generally, with property the longer you hold onto it the more its value will rise; and the more money you will make. If you don’t want to wait a long time then a flip deal may be your ideal strategy. Whereas longer term, buy to let deals will provide a higher return.

Types of investors

Hands Off, No Hassle Investor

If you are looking for a passive income through rent, then you may fall into this category. You likely do not want to be involved in the management process. You may opt into passing this responsibility to someone else.

For this kind of investor, a property which already has a long-term tenant in place may be best for you. You may also prefer a new build property managed by an agent.

Of course, the cost of an agent is something you will need to bear in mind. But many consider it a small price to pay. As a result of paying an agent you will have more time to focus on other business ventures. This can produce further avenues for income.

The Purchase, Refurbish and Resale Investor

This kind of investor doesn’t mind digging a bit deeper than surface level in order to make high returns. This process involves buying a property cheaper than market value. You then work on the property ensuring it is renovated it to a high standard. Following this you then sell the property for a higher price than the one paid.

The trick to this investment is to get the property as cheaply as you can and budgeting in the works. The more you spend refurbishing a property the more you will make when the time comes to put it back on the market.

Decorating a house neutral tones allows potential buyers to visualise themselves living there, this will in turn produce a higher selling price via a bidding war.

The “Cashflow is Key” investor

If this sounds like you, then you should research Houses of Multiple Occupation (HMO’s). A HMO is a house which is home to multiple tenants from different households. These buildings have shared amenities such as shared kitchens or bathrooms. Each room can to be rented out so it will generate a high level of rental income.

HMO’s are often harder to wrap your head around so make sure you research thoroughly. These kinds of investments are good for monthly cash flow as it is unlikely you will never have £0 rental income at any given time.

The Investor Driven by Capital Growth

If you are driven by capital growth and see rental income as a secondary benefit, then this is you as an investor. Also, if you wish to safeguard your wealth over time by focussing on capital growth, then you also fall into this category of investor.