To invest in the UK, you must understand your needs and goals, and find a suitable strategy. This is often based on different factors, such as personal financial status, risk attitude, goals, ambitions, available time, skills, experience, credit rating, short-term or Long-term income, etc., vary from person to person, and the situation of "A's honey, B's arsenic" will also appear.
In addition, when studying different strategies, you may encounter terms that are relatively rare in Hong Kong. This article will first select two more common terms for you to get started as soon as possible.
BTL: Buy To Let can be understood as renting a house. It is a Buy and Hold Strategy, and is generally the most effective way to earn long-term cash flow and equity.
BTL contains the least risk, is easier to obtain loans, and is easy to manage. For new investors who do not yet have credit footprints in the UK, it may be more difficult to obtain BTL loans. Even if they do, the interest rate is quite high. Therefore, another strategy is Buy in Cash and Rent it out, which is to use cash first. Buy it and rent it out, and then refinance the property in about six months.
New investors can also consider Buy, Refurbish, Refinance, that is, buy-refurbish-refinance. Similarly, first purchase the property with cash, then do the exterior decoration works, or even major changes such as adding additional rooms, and then refinance within a few months. Through this strategy, investors can obtain a lot of capital, because the value of the refurbished property will increase, especially if it was originally purchased at a price below the market value (below market value), the equity gain will be very high. Big.
To adopt this strategy, the key point is to prove to Mortgage brokers and surveyors that the property has increased in value. The photos can be compared before and after to show the skill. However, refurbished and value-added properties do not necessarily have to be in expensive locations. As long as there are job opportunities nearby, there will naturally be housing needs, and it is also worth investing in renovation. When you have refinancing capital, investors can build your investment portfolio. Technically, if you buy a property with cash, you generally don’t have to wait six months, but this is a self-evident rule in the UK industry, so most people will wait six months before refinancing.
BTS, Buy to Sell , can also be understood as Flip, which means buying a property and then quickly selling it at a higher price. This strategy usually involves refurbishing, but it is not absolute. Some people buy houses at huge discounts and then quickly put them back on the market at a higher price. Of course, buyers need to have sufficient reasons to prove why the property is worth a higher price. The answer cannot be capital growth, because it is only a few months after the purchase and the sale, and it is difficult for the capital to increase in the short term. This is also the reason why so many people add value by refurbishing.
Compared with investors who create long-term cash flow in BTL, those who adopt BTS will hope to obtain a lump-sum income within a few months.
Which strategy is more suitable? It is difficult to generalize, but it really depends on the needs. After all, there has never been a one-size-fits-all investment strategy in the world.