| This is our second article in our 4 part series that | | | | the market. There are 5 main types of tenants |
| will show you how to use the current property | | | | and each one will have their own requirements for |
| market conditions to make immediate profits, | | | | a property and preferred locations within a town |
| create positive cash flow and also how you can | | | | or city. The 5 main tenant types are as follows; |
| reduce your overall risks by using sensible | | | | Key Workers; Such as Teachers, nurses or |
| strategies. | | | | doctors |
| Ok in this article, we explain why you should be | | | | Students |
| focusing on rental income to generate you | | | | Young Professionals |
| positive cash flow month on month so you can | | | | Young Families |
| still make a profit even if property prices are | | | | Professional Sharers |
| falling. | | | | Now this is the important bit; In order to make |
| There can be no doubting that the UK property | | | | sure that you let your property out quickly, |
| market is going through a tough time and that | | | | maximise rents and minimise void periods, it is |
| property prices are slowly falling in many areas. If | | | | important that you buy the right property in the |
| truth be known, no one can really tell what will | | | | right location for the right tenant. It is also |
| exactly happen in the future but even though you | | | | important to analyse where the highest rental |
| cannot control what happens to the property | | | | demand is for a location and then satisfy that |
| market, you can make sure that you make a | | | | demand with what the market is craving. For |
| profit from your property investments and here | | | | example, if you want to target key workers, you |
| is how. | | | | should buy properties close to local schools or |
| With buyers becoming very nervous about buying | | | | hospitals and buy a 2 bed flat or small terrace |
| and mortgage lenders being very strict on who | | | | house that could accommodate possibly 2 tenants |
| they will lend to, this means that many people | | | | as these tenants like to share to save on costs. |
| (especially first time buyers) will not beable to | | | | If you are targeting the student market, it is |
| afford to get onto the property ladder. However, | | | | important that you buy a property that is located |
| if people are not buying they will rent instead until | | | | close to the university campus and focus on |
| conditions improve. And with this in mind, we fully | | | | buying a 3 or 4 bed terrace property or |
| expect rental demand to increase over the | | | | converting a property to accommodate 5 or |
| coming months as many choose to rent and wait | | | | more students. |
| until property prices fall or until the credit crunch | | | | So before you buy any properties, make sure |
| eases. | | | | you understand the local tenant market fully, and |
| This extra demand, along with falling house prices | | | | buy the right property in the right location for the |
| means that rents should slowly increase and rental | | | | right tenant. |
| yields(rental returns) will be more favourable. This | | | | Another way that you can increase rents for |
| will create a great opportunity for property | | | | each of your properties is to offer properties fully |
| investors to focus on buying properties and | | | | furnished. A fully furnished property will always |
| targeting certain tenants where their investments | | | | command a premium in rent because a tenant |
| will generate good positive cash flows month on | | | | can literally move into the flat and not have to |
| month. This is a very powerful strategy to focus | | | | worry about buying furniture etc as it is all there. |
| on in a falling market because no matter what | | | | This concludes our second article in our special 4 |
| property prices do, you are still making money | | | | part property investment strategy series. One of |
| from your investments and you know that in | | | | the key elements of successful property |
| time, conditions will improve and property prices | | | | investment is to focus on rental income and focus |
| will rise once again. | | | | on generating good positive cash flows from your |
| But this is only half the story! If you are going to | | | | property portfolio. So no matter what happens to |
| focus on this strategy, you must have a good | | | | property prices, you can be sure that month on |
| understanding of the tenant market and | | | | month, your property investments are making |
| understand the main tenant types that dominate | | | | you money. |