There is a famous saying that says: “People do not plan to fail, but they fail to plan” and this is the case in real estate investment, investing in real estate in the United Kingdom is very profitable, and certainly there are a number of things that you will need to know before entering the world of real estate investment in it to achieve results The most important of which this article will present to you.
Types of investment in the UK real estate market
Investors who wish to invest in real estate in the United Kingdom can choose between a number of opportunities offered by the country, the most important of which are:
Buying a ready-made property and investing in renting it
It is the most popular method of real estate investment in the United Kingdom, where most investors find that it is better for them to invest more by renting, in which they will obtain a stable and long-term income that can be increased with the increase in the value of the property.
In some regions of the United Kingdom, the rental yield reaches 8% While it is about 3% in other regions, at the same time, the investor can obtain insurance to cover damages, maintenance costs, and legal procedures accompanying his ownership of the property.
Investing in developing a property and then selling it at a higher price
For those who prefer to invest to get a quick return, they can consider the field of real estate development, where investors renovate and make the necessary modifications to the property, add a number of facilities to it, and then sell it at a higher price.
The demand for this type of investment is increasing in the United Kingdom, especially in the residential real estate market, and while profit is the primary incentive from this investment, social value can also be generated from these developments in real estate, providing housing, workplaces, educational facilities, and more in improving the surrounding community.
Completely rehabilitating the property to sell it at a higher amount
Rebuilding and completely renovating the property is another investment option that must be considered, as investors buy a property while it is still under construction or one of the unused properties that carry potential opportunities, the investor makes many additions and improvements to it and then it is sold or rented once it is completed at a higher amount.
This investment strategy deals with a lot of planning by investors, especially the financial situation and the budget allocated for restructuring operations, in addition to looking at the current market situation and the state of demand for this type of investment and what it might bring in the future.
Financial return from real estate investment in the United Kingdom
As a rule, a financial return of about 7% or higher is a good return for those interested in making profits from real estate investment. The amount of the return varies according to the state of the real estate market in addition to many factors related to the property itself.
The 6 best cities in the United Kingdom came with the highest financial return as follows: Manchester (6.53%), Birmingham and Derby (6%), Leeds (5.27%), Sheffield (4.45%), and London (4.1%).
The amount of tax incurred on real estate investment
This requires the investor to read and study deeply to know the most important expenses that will result in him, as the profits generated from real estate investment in the United Kingdom are subject to income tax, and any gain is evaluated according to rates ranging between 18% and 28% for residential properties or 10% and 20% for non-residential properties.
Depending on the individual’s income level, the amount of tax that the investor will pay is affected by several factors, such as if you are a resident of the country and how much money you make from real estate investment, and if you are not a resident of the United Kingdom, you will only be taxed on the money that you earn in United kingdom.
Choosing the right investment place
There are many wonderful real estate investment places throughout the United Kingdom from north to south, but according to the experiences of investors it is advised to focus more on the central and northern regions of the United Kingdom because it contains cheaper real estate with higher financial returns, regardless of the type of suitable investments and attractive investment points surrounding With it
Investors should also know the target group of their investment in the United Kingdom and the job opportunities provided by the region, which will certainly raise the amount of the property in later periods and will enable the investor to achieve a higher return.
In Reach Real Estate Investment, we have sufficient experience and knowledge in the field of real estate with our branches spread in more than 13 countries around the world. If you are interested in real estate investment options in the United Kingdom, get your free consultation and contact us via the link here.