Building a property investment portfolio is no longer something that only the wealthy in the UK do. These days anyone can invest money into bricks and mortar. In this country and abroad, buying-to-let can also now play a key role within any investment portfolio, generally delivering excellent returns to investors.
However the property market has not always achieved such impressive results. In the 70's and 80's returns were as low as three percent, and this poor performance has been attributed to a number of factors, in particular the boom-bust development cycles of the time which caused a near collapse of the rental market. This difficult time was compounded by a phase of high-inflation, which in effect 'ate up' the real value of rental income.
Market experts are confident that a repeat of this failure is highly unlikely in the foreseeable future. This belief is held because of a number of different reasons, but is largely based on the fact that market research and relevant information is so much better than it was twenty or thirty years ago. This improved knowledge means that market performance can be predicted much more effectively, thus reducing the risk of boom-bust property cycles. In addition to this, stricter housing development legislation and increasingly cautious lenders mean that property supply is much more consistent, and this also plays a major role in creating a healthy and stable property market.
One of the areas of property investment that has seen exceptional results is holiday accommodation. The high demand for short-term rental properties in popular UK holiday resorts means that investors can really profit. Holidaymakers are generally prepared to pay premium prices for the right kind of property, and nowadays income can be expected throughout the year, with people taking UK breaks at Christmas and Easter, as well as during the summer months.
If you are considering investing in holiday rental property, you should take financial advice as rules and regulations differ from regular leasing. If you need to borrow money to purchase the property, you may also find that getting a buy to let mortgage is more difficult than a regular mortgage. This is because your tenants will only be on one or two week rental contracts and income cannot therefore be guaranteed, making you a greater risk to the mortgage provider.