Property Niches That You Need to Explore
There is one significant similarity or “secret to success” that real estate shares with business. It’s the importance of finding your niche. Whether you want to choose the most profitable area for investment for one property or you want to keep growing your property portfolio and want consistent gains, the niche could be the answer you’re looking to find. It’s that specific area of business that works best to the market you’re in touch with. Here a few niches that anyone looking to get into real estate can explore.
The family home is one of the broadest “niches”, which might discount it as an option for some. Space, curb appeal, and house features all play a role but it is location at the end of the day that rules the sale and profitability of family homes. You need to look at the area and what it has to offer to families, such as schools, access to public transport, proximity to hospitals, and other services. Think of the family needs and choose to invest in homes that are close to them. Single-family homes are, at the moment, one of the most active sectors of the real estate market, period. If you’re renting, as more families are indeed renting today, you’re inclined to make back around 15% of the cost to buy the property within the first year alone. That is a more-than-significant rate of return on a rental.
Location plays just as significant a role when it comes to investing in buy-to-let properties for students. The most key priority should be proximity to the college in question. There are a variety of reasons why letting to students can be such a good option, too. There’s a massive need for off-campus student housing, with rents tending to be higher despite the fact that tenant standards are, on average, significantly lower. Most student accommodation won’t rent to those without a guarantor, either. Because these guarantors are often parents in a position to financially support their children, you can expect rent payments more reliably. Advertising tends to be easier, too, with many student landlords making use of university websites and publications to get a direct line to the market they want to target. There is some difficulty to be expected with students often being young and lacking some control, but a more detailed lease including rules on noise and damage/repairs can help you minimize some of those risks.
The professional approach
There’s a growing number of young, single professional people on the market, as well, particularly within urban areas. Finding property close to central city hubs and commercial sectors is how you target this market. But to make the best possible investments in this niche, it’s a good idea to try to be proactive. Look at the signs that an area in the city is on an upward trajectory. See if there’s a marketing push for that specific area, or if new business premises are starting to open there. It’s challenging to be the first person to begin capitalizing on an up-and-coming area, but if you’re vigilant and paying close attention to developments and projects within the city, you could jump on the opportunity while the going’s still good.
Every day’s a vacation
If you like an investment that comes with a few extra perks to offer your personal life, then you might want to look at the idea of investing in a vacation home. Beyond getting a place that you can rent out to travelers, you also have a spot where you can get away from it all. Again, a keen eye has to be kept on the market to spot vacation homes in areas with high enough demand to justify the cost. There’s also the danger that you could often see months with zero income when the location isn’t in its “tourist season.” That said, for long-term investments, holiday homes almost always increase significantly in value as time goes on, so long as there isn’t any unforeseen damage done to it.
The bounty of nature
If you want to talk about investments that grow with time, then you have to talk about getting properties in rural areas. As cities expand and the romantic ideal of a quiet, peaceful country life fills the head of many urbanites, country homes tend to avoid some of the most severe downturns in housing price decreases while benefit from the growth of the real estate market. They’re a high-value target, so acting on available hunting ranches when you find them is essential. They also make for an impressive revenue stream if you choose to wait before you sell them, as well. You should overestimate the value of livestock farming, but it can serve as an excellent bonus on top of the profit of the eventual sale.
Commercial real estate is another vast swathe of the market, one that comprises a whole variety of property types such as office buildings, warehouses, and more. You should choose a niche amongst these to specialize even further in then, again, keep an eye out for the commercial sectors starting to grow in the city. This area is one of the markets that is least insulated from the twists and turns of the economy and general business health, however, so the risks are high. However, you can make a lot more money renting out office space than you might when renting out the equivalent residential space.
The choice of how you specialize your investments from now on might determine on a lot of predetermined factors, like which kind of real estate you know the most about or what type of market you have the most in-depth connections. However, that doesn’t mean you can’t willfully choose a niche, get educated on what makes it the most profitable option, and start prioritizing it.