How to Make Money from Property with Buy to Let Investment (2024)

Investment is one of the best and most effective methods when it comes to how to make money in property, but what are the most common strategies used? If you’re interested in finding out how to make money investing in property, here are the most popular investment methods to consider.

Buy-to-let is one of the most popular methods for making money out of property in the UK. The process of traditional buy-to-let is very simple – you will purchase a property (usually an apartment) and rent it out to tenants in order to generate rental income. This could either be a student or residential property or commercial property. Some investors also choose more short-term buy-to-let strategies, such as buying Airbnb properties for holiday let, although residential and student buy-to-let is the preferred option as it brings consistent returns all year round. The reason that buy-to-let is considered such a good investment strategy is because of the potential to make large amounts of money from both rental income and capital growth. It is for this reason that buy to let is seen as a great way to boost your savings, according to the Big Investment.

The UK housing market and rental market are thriving, with rising rental costs and increasing demand being seen across major property cities. For those wondering how to make money from buy to let, rental yields are your answer. When you invest in a buy-to-let property, you’ll receive rental returns on a regular basis, often guaranteed if you purchase the property with an investment company.

In certain top-performing areas such as North West cities, Liverpool and Manchester, increasing tenant demand has led rental costs to rise. In the last five years, the average Manchester property has increased by a whopping 36.41%, with a 20-year growth rate recorded of almost 320% – the highest out of every major UK city. This is possibly down to the increasing population of young professionals and students – the most popular tenant groups for UK property. It is for this reason that if you want to know how to make money from buy-to-let properties, you should make sure you research the best buy-to-let areas to reap the full benefits of your investment.

How To Make Money From Buy to Let Rental Properties

To understand how to make money from a rental property, you should make sure you buy a property in an area where rental costs are high but property prices are low. This allows you to generate the most attractive rental yields for your investment. A good example of this kind of city is Liverpool, where rental yields can reach almost 9% in some areas, and the demand for rental properties is high.

Pros

• Once you know the tips and tricks of how to make money from rental properties, you can make a regular and guaranteed rental income.
• On top of rental income, you can make significant capital growth returns if your property grows in value by the time you sell it.
• You can often use a buy-to-let mortgage to help you pay for the investment.
• You can make your investment from anywhere in the world. For instance, if you don’t live in the UK, you can still invest in UK buy-to-let by enlisting the help of a property management company that will take care of the property for you.

Cons

• If you can’t find a long-term tenant for your property, you could suffer from a loss of income.
• Rental yields and capital growth can differ depending on the area you invest in.

Property renovation, also referred to as ‘buy to sell’, is another of the most common investment strategies. Unlike buy-to-let, this kind of investment involves you purchasing a property for a low price and refurbishing it until the value of the property has increased. The key in how to make money from a property renovation lies with knowledge. You need to be knowledgeable about the property market in the area you’re interested in, identifying certain areas where property prices are set to grow through capital appreciation. You also need to know tips and tricks on how to add value to a home, which could mean having a good eye for interior design or property trends. If the property you invest in requires a much more intensive renovation, you may even need to get advice from a property developer. Because of this, property renovation projects are usually taken on by property experts rather than those just getting started in property investment.

Property renovation projects can be successful if you do your research and properly plan out your investment. Past investors have had a lot of success with these types of investments, and they’re a good option if you want to generate returns in the form of a lump sum. Buy-to-let is often favoured over property renovation projects, however, as this allows you to make regular rental returns on top of returns through the sale of the property.

Pros

• You can generate a large return on investment if you purchase a property in a high-growth area and make the right kind of renovations.
• The process of buy-to-sell can be quite quick depending on how long your renovations take and how long the property takes to sell, which makes it a good option for those who want short-term returns in a lump sum.

Cons

• If you don’t have the right industry knowledge, the investment could suffer, and you could waste money on unnecessary renovations.
• Property renovation requires a lot of dedication and hard work, making it a tricky investment if you don’t have a lot of free time and are looking for something more hassle-free.

Now that you know some of the most common ways people make money from property – buy-to-let or buy-to-sell investment – you should also become aware of some of the lesser-known methods of making money in property. One way to make money from property in a more indirect way is through investing in a real estate investment trust. A real estate investment trust (REIT) is a company that generates income through the ownership or operation of property. To invest in an REIT, an investor would purchase shares in the company and therefore make money from property without actually owning an investment property themselves. This type of method can be good for people who want to make money from property in a more hands-off way, but like any stock investment, REITs can be more risky than investing in a physical asset like property.

Another alternative method of investing in property is with hotel investments. Hotel investments work in a similar way to owning a holiday rental, with the difference being that you’re investing in a room within a hotel building which is owned by somebody else. Like REITs, there are pros and cons to this strategy as a way to make money from property. One of the pros is that rental returns could be high depending on the hotel and its popularity; however, a big con is the fact that your investment could suffer if the hotel doesn’t perform well.

So out of those different property investment strategies, is buy to let the best answer in how to make money from your property? When you look at the benefits that come with buy to let, it’s easy to see why so many people consider this the best property investment strategy.

Here are some of the main benefits of choosing buy to let for your property investment strategy.

When wondering how to make money from property, UK property investment is your answer. The UK housing market and rental market is thriving, with rising rental costs and increasing demand being seen across major property cities. In certain top-performing areas such as Liverpool and Manchester, increasing tenant demand has led rental costs to rise.

By investing in student or residential property in areas with large populations of students and young people, a property investor can expect to find a tenant for their buy-to-let property a lot more easily.

It is for this reason that buy-to-let is often considered one of the best types of investments and the best way to invest money to make money quickly.

If you’re looking for guidance on how to make money from property in the UK, one of the main tips is to do a lot of research on locations.

When looking at property investment UK, there are tonnes of ideal places to consider. Areas like the North West are often considered some of the best places to invest in property in all of Europe, so be sure to research thoroughly to make the best investment possible.

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With certain types of property investing strategies, such as flipping a property, the process can be very slow. Flipping property involves buying bargain property which is usually run-down and in need of a refresh, making some major improvements such as redecorating and fitting a new kitchen and bathroom, and then selling it for a higher price. While this is a good investment option for some, it can take a long time before you see any return on your investment.

For those who aren’t interested in finding out how to make money from property renovation, there’s buy-to-let. And for those wondering how to make money from buy to let, rental yields are your answer. When you invest in a buy-to-let property, you’ll receive rental returns on a regular basis, often guaranteed if you purchase the property with an investment company.

At RWinvest, for instance, some of our property deals come with guaranteed yields for a period of one or two years, giving you peace of mind that you’ll see an instant return from your investment. This is a particularly good method of making money from property for beginners who are concerned about the risk of losing profit that can come from property investing.