As a financial specialist, I am subject to certain queries from friends, family, colleagues and on occasion, strangers in the street. One of the most common questions is, based on how to invest. So in this article, I have taken a figure at random (30k) and will look at how to invest 30k into property.
What To Consider Before Investing £30k
If you are new to investing, making the choice of provider, broker, vehicle and product can be a pretty daunting experience. Our advice is to take things slow, conduct ample due diligence, check reviews and look at the past performance of opportunities offered. Unethical brokers dont last long in finance, and companies that have no history or reviews should instantly raise alarm bells.
Unethical brokerages work by applying urgency to opportunities, always remember you set the pace and amount when you invest.
What Are My Investment Goals?
Another key consideration is to understand what you want from your investments. Now for a bigger, this may seem like an obvious question. But profit can come in several different forms:
1. Capital appreciation:
One investment goal is to seek capital appreciation, which involves increasing the value of your investment over time. This typically applies to assets such as stocks, real estate, or high-growth companies. The aim is to buy investments at a lower price and sell them at a higher price, generating a profit from the appreciation in value.
2. Income generation:
Generating a regular income from your investments is another objective to consider. This can involve investments that provide a steady stream of cash flow, such as dividend-paying stocks, bonds, or rental properties. Income generation can be particularly appealing for individuals seeking a reliable source of income to supplement their salary or support their lifestyle.
3. Wealth preservation
Some investors prioritise the preservation of their wealth, aiming to protect their initial investment and maintain its value. This objective often involves more conservative investments, such as high-quality bonds or stable dividend stocks, which have lower risks compared to higher-growth assets. Wealth preservation is commonly favoured by individuals who prioritise capital protection over higher returns.
Risk management:
For many investors, managing risk is a significant investment goal. This involves constructing a diversified portfolio that spreads investments across different asset classes and sectors to reduce the impact of any single investment’s performance on the overall portfolio. Risk management goals can help investors avoid excessive exposure to a particular asset and mitigate potential losses.
Long-term financial goals:
Your investment goals may also be tied to specific long-term financial objectives. These can include saving for retirement, funding your children’s education, purchasing a home, or starting a business. Aligning your investments with these goals allows you to work towards achieving them over an extended period. Long-term financial goals often require a strategic investment plan tailored to your specific timeline and risk tolerance.
Socially responsible investing:
Investors increasingly prioritize incorporating their values and ethics into their investment decisions, including a focus on green investment. Socially responsible investing (SRI) or Environmental, Social, and Governance (ESG) investing aims to generate both financial returns and positive social or environmental impacts. By investing in companies or funds that adhere to specific ESG criteria, with a particular emphasis on green investment strategies, investors can support causes they care about, such as environmental sustainability, while seeking financial growth.
What is My Risk Tolerance?
No investment is risk-free so before deciding on where to invest, you need to understand the balancing act between risk and return.
What Should I Do With My Money Before I Invest?
Firstly, it’s crucial to address any outstanding high-interest debts, such as credit cards or payday loans. Clearing these debts is vital as they can erode your savings and limit your investment options. By paying off these debts, you free up funds and create a healthier financial foundation.
Secondly, it’s wise to establish an emergency fund. Having £30k is a significant amount of money, and unforeseen circumstances can jeopardize your financial stability. By setting aside a portion of your savings as an emergency fund, you create a safety net that can help you navigate unexpected challenges and get back on track.
By taking these proactive steps, you enhance your financial well-being and create a more solid footing before embarking on your investment journey.
What are my options?
When investing in property there are several routes to market. I will lay out what I feel are the best investment vehicles with 30k.
Bonds
A great way to invest in property is through buying property bonds. Often regaled as the safest type of investment, buying bonds is a great way for beginners and experienced investors alike
When you invest in a property bond you are essentially loading a developer money to either start or complete a real estate project. The bond will ordinarily increase in value over some time, with a pre-determined payout at the end of a pre-determined amount of time.
In Our Opinion
In my opinion property bonds are the foundation of a solid portfolio, I have handpicked the developers that New Capital Link works with, this allows us to add as much security as possible to an already secure investment vehicle.
We are currently working with Northumberland Living and Ashbrooks Developers both of whom have exceptional experience and untarnished track records. If you’re looking to invest 30k into real property, you would struggle to find a better option than these two industry giants. Both generate above 10% per annum while ensuring the safety and continuity of capital.
Real Estate
The second way to invest in property is to physically buy property to flip or rent out. But unfortunately at the moment in the United Kingdom, you would struggle to find a suitable property for 30k.
In Our Opinion
Investing in real estate can be a valuable addition to a diversified portfolio, offering tangible assets, potential for income generation, diversification benefits, and long-term capital appreciation. Real estate can serve as an inflation hedge, providing stability and potential returns. However, it requires capital, entails illiquidity, is influenced by market conditions and economic factors, involves active management and maintenance, and demands local market knowledge. Thorough research, professional advice, and alignment with financial goals and risk tolerance are crucial for successful real estate investment.
Our Top Tips
Tip 1: Choose between renting or selling your investment property or investing in a bond
Tip 2: If your choosing to invest in physical real estate select a property type
Tip 3: Start by specialising in one property investment strategy
Tip 4: Set short and long-term goals
Tip 5: Consider the risks of investing in property
Tip 6: Review the rent annually
Tip 7: Plan and budget for additional costs
Tip 8: Learn about the various rules and legal requirements
Tip 9: Be aware of buy-to-let taxes
Tip 11: Start small and grow gradually
Tip 14: Calculate your average rental yield
Tip 15: Remain open-minded
Tip 16: Look into build-to-rent property
Tip 17: Invest in off-plan properties
Tip 18: Diversify your investment properties
Tip 19: Invest in a short-term let property
Tip 20: Save an emergency fund, never invest all your disposable income
Tip 21: Work with a property investment company
At New Capital Link we specialise in fixed income Bonds, we have a dedicated team of professionals who excel at identifying bonds that offer exceptional growth opportunities. Our team works diligently to ensure that our clients are positioned for success in the bond market. Whether you’re a seasoned investor or new to bond investing, we are here to provide the guidance and expertise you need to make informed investment decisions.
New capital link is fully licensed as an alternative investment broker, Contact us today.
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