Real Estate the Easy Way
Real estate has long been considered an attractive investment. The amount of land in the world (supply) is fixed and finite, whereas the population (demand) continues to increase. Though there may be the odd hiccup, the overall trend of real estate prices is and will almost certainly remain upward. Not only do capital values increase but real estate also generates a valuable yield in the form of rental income.
Having said that, simply buying somewhere to live can take most of our working lives. So purchasing a second property for investment can seem out of reach. Not only do we need to take a chance on finding the right property, get it in a state for renting, find suitable renters, hope they’ll pay the rent, keep it maintained etc etc etc. We probably also need to take on a mortgage and hope the rental income covers the repayments.
For a long time real estate investment trusts (REITs) have provided an answer in North America. These are essentially traded funds that invest in real estate. The rental income is shared among the investors, as are the costs of management, maintenance and voids (unlet periods). Sure, you might miss out on that exceptional bargain on which you make a killing, but you’ll miss out on the turkeys too. And you won’t get woken at 2am by some irate renter demanding you fix their bathroom.
In the past there were no generally traded UK funds investing in residential real estate. However, recent legislation permitting the creation of REITs is changing that.
Traditionally private sector rented housing has not enjoyed a good reputation in the UK with dodgy landlords renting out barely habitable accommodation at exorbitant rents. The sector has been small with those that could afford to buying their homes, and those that couldn’t relying on an extensive supply of reasonably priced and well-maintained subsidized “social” housing. As the stock of social housing has diminished so the private rental sector has been expanding to take its place.
As house prices continue to rise above the means of first-time buyers the trend is set to continue. A recent report by Market research organisation Mintel suggests the number of “buy-to-let” home owners may double in the next three years [http://news.bbc.co.uk/1/hi/business/6592663.stm].
http://www.thepropertyinvestmentmarket.com/featured in a recent article in the English newspaper The Daily Mail. The Property Investment Market allows investors to buy shares in one or more properties from as little as £1 (GBP). All properties are professionally managed and let out to provide an income for property investors. It also allows customers to spread risk across many different properties even with a very low initial investment.
While I don’t specifically endorse thepropertyinvestmentmarket.com, I do recommend that those interested in investing in real estate but unable or unwilling to take the risk of buying and managing property directly investigate this and similar opportunities further.
[NB I do not work for thepropertyinvestmentmarket.com and do not receive any commissions from them for business arising from this posting.]

