Diversifying Your Property Investment Portfolio For Success

The realm of property investment has always been dynamic, responding to market trends and economic shifts. Recently, the increase in interest rates has spurred investors to rethink their strategies. As traditional avenues for investment face challenges, these investors are now turning towards diversification, exploring opportunities beyond standard residential properties.

This shift involves considering a spectrum of options including venturing further up north of the UK for better rental returns, delving into specialisations such as HMOs, student lets, holiday homes, and commercial or semi-commercial properties.

Options for Better Rental Returns

One popular trend among investors is the exploration of properties in the northern region. Cities like Manchester, Leeds, and Liverpool have witnessed a surge in interest due to their lower entry costs, high demand for rental properties and promising rental yields. Investors are finding these areas conducive for long-term investment, capitalising on the potential for higher returns as compared to the saturated markets in the south.

Data from Zoopla backs up these options, with average gross yield for locations in the North ranging from 8% - 9%. Buy-to-let investors should look for a yield of between 6% - 8%, so these Northern regions are incredibly attractive investment opportunities.

HMOs, Student Lets and Holiday Homes

HMOs have become increasingly popular due to their ability to generate higher rental incomes by accommodating multiple tenants. As housing demands continue to rise, particularly among young professionals and students, converting properties into HMOs presents a lucrative option for investors.

University towns and cities offer a consistent demand for student accommodation. Investing in student housing provides a stable income source, especially in cities with popular universities. Catering to the specific needs of students can result in long-term, reliable tenancies.

The tourism industry remains robust, making holiday lets an attractive investment. Coastal areas, scenic countryside locations, and popular tourist destinations offer opportunities for high-rental incomes, especially during peak seasons. Engaging with short-term holiday rental platforms can maximise occupancy rates and overall profitability.

Commercial and Semi-Commercial Properties

An alternative approach to property portfolio diversification involves commercial and semi-commercial properties. Investing in shops, offices, warehouses, or mixed-use spaces provides a stable income source with longer lease agreements. These properties often yield consistent returns, shielding investors from the fluctuations associated with the residential market.

At Vincent Burch Mortgage Services, our friendly team is on hand to give you expert advice and guidance every step of the way towards the right mortgage options for you and your business. Call 01603 340644 or email [email protected]