When contemplating buying property as an investment as well as considering the features of the property, it is also essential that the management of the property is taken into account. The property investor also needs to acknowledge how involved they wish to be with property. Do they wish to be an active, hands on property owner or an armchair property investor. The concept of a passive or armchair property investor has become popular in recent years they are attractive to those who have a busy lifestyle and essential for many international property investors who have grown in numbers.
So what do we mean by the term armchair property investor, this label is used to describe investors who are happy to leave the management and decisions about the property to a management company or specialist operator . The property investor is therefore seen as “hands off “and passive and as the phrase suggests, can enjoy the benefits of property investment from the comfort of his or her armchair. The UK has in recent years seen a high volume of property investment from international property investors. With the geographical distance and also sometimes time difference between the property owner and the property, the international property purchaser will need for the property to be fully managed.
For some residential properties this can involve employing the full management service of a professional letting agent, Some properties are offered with a leaseback where clients have the option to lease the property back to the developer or management company. They in turn will have agreement in place regarding rentals for the property and are willing to offer a rental assurance, ie contractually guarantee to pay level of income or yield to the property investor.
Other opportunities such as student developments are available where the buildings are constructed with recommendations and feedback from a specialist operator who at completion will fully manage all the properties who have selected the rental scheme. This is a successful and rewarding practice as the specialist student operator can market the properties in advance through their existing network and connections to achieve good levels of rent and occupancy. Economies of scale can also be achieved by properties being managed in this way. Care home projects can offer a similar arrangement as can hotels and selected commercial projects. Some of the student schemes may offer a rental assurance scheme for the first couple of years whilst the development is established in the market.
If you are looking at a passive or armchair property investment then it is vital that when carry out the research on your property investment you pay particular attention to the operator or management company. Branding can also be important as this can also factor how successful the property investment will perform. This does not mean however, the other key points such as location, competition, facilities offered and demand generators should be ignored. For these fully managed services it is important to acknowledge that this level of service normally is charged at a higher level than the lower levels of property management and so should be factored into the property assessment.
Investment Property Consults have considerable knowledge and expertise in the area of property investment and are happy to assist property investors with information as to how these developments work. We are also able to assist in identifying the right property to match the motive and requirements of those looking to buy property as an investment.