Residential Investment Methods
1
Buy Refurbish Refinance Rent (BRRR)
The BRRR method is used to buy a property, restore or renovate it, refinance the property to recover the invested funds, and then rent it out for consistent rental income. This strategy is profitable for investors as it allows them to acquire properties below market value, increase their value through renovation, and ultimately generate cash flow from rental income. By refinancing the property, investors can access the equity they have created and use it to fund future investment opportunities. Essentially we are using the 'rinse and repeat' method allowing us to scale up with our original capital.
2
Buy To Let or Buy to SA
(BTL or B2SA)
A buy-to-let investment refers to purchasing a property with the intention of renting it out to tenants. It is considered profitable for investors because they can generate regular rental income from tenants, which can cover the mortgage costs and potentially provide a steady stream of profit. Additionally, the value of the property may appreciate over time, allowing investors to sell it at a higher price in the future, further increasing their return on investment. Buy-to-serviced accommodation is an investment strategy where an investor purchases a property specifically to rent it out as a serviced apartment or short-term rental. This means that the property is furnished, managed, and maintained by a professional management company. It is profitable for investors because they can capitalize on the growing demand for short-term rentals and business travelers who prefer the convenience and amenities of a serviced apartment over a traditional hotel. Additionally, buy-to-serviced accommodation offers higher rental yields and potential for capital appreciation compared to long-term residential rentals.
3
Buy Refurbish Sell
(Property Flipping)
A buy refurbish sell or property flipping deal refers to a property investment strategy where investors purchase properties, renovate or improve them, and then sell them quickly for a profit. The process involves identifying undervalued or distressed properties, making necessary repairs and upgrades, and strategically marketing and selling them. This strategy is profitable for investors because they can buy properties below market value, add value through renovations, and sell at a higher price in a relatively short period of time, capitalising on the potential increase in property value and demand. The key to this method is keeping renovation costs as low as possible, buying below market value and pushing the property re-valuation as high as possible to maximise profit.
4
HMO
(Houses In Multiple Occupation)
An HMO (House in Multiple Occupation) deal refers to a property investment strategy where a property is converted into multiple rental units, typically consisting of individual bedrooms, with shared common areas. It is profitable for investors because HMO properties can generate higher rental income compared to single-let properties. By renting out individual rooms, investors can maximise the rental yield and achieve higher overall returns. Additionally, HMO properties often appeal to a specific market of tenants, such as students or young professionals, creating a consistent demand and reducing void periods. Overall, HMO deals offer investors the potential for increased rental income, higher occupancy rates, and potentially higher property value appreciation.
5
Off-Plan and Hands Off Investments
An off-plan deal refers to the purchase of a property before it is built or completed. Investors can secure these deals by paying a deposit to the developer. The advantage for investors is the opportunity to purchase at a lower price compared to the market value at completion. As the property is still under construction, there may also be potential for capital appreciation by the time it is finished. Investors can profit from off-plan deals by selling the property at a higher price once it is completed or by renting it out for long-term income. A hands-off deal refers to an investment opportunity where the investor does not need to actively manage or be involved in day-to-day operations. The profitability lies in the fact that the investor can generate income or returns without actively participating in the business or property. This can be achieved through passive income streams such as rental income from real estate, dividends from stocks or mutual funds, or interest from investments. By having minimal involvement and allowing the investment to generate passive income, investors can focus on other ventures or enjoy a more hands-off approach to their financial portfolio.
6
Property Development
Property development refers to the act of acquiring land or pre-existing properties with the intention of constructing new properties. Property developers initiate ventures aimed at constructing and offering new residential or commercial properties for sale or rent. Property development demands significant capital investment and necessitates skill, know-how, and proficiency in construction, planning, and project management. However they offer massive lucrative return on investment if done successfully.
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