London Real Estate Investment Trusts Are on the Rise
Many of the real estate investment trusts (Reits) based within the M25 are making positive moves thanks to the continuing demand for high quality office space in the capital. As the demand increases, so too do the rental charges and the asset value of those trusts that hold these much sought after properties.
Despite numerous reassurances from the government that new properties are on the way, supply simply cannot keep up with demand in one of the busiest business cities in the world. Having such a competitive marketplace in which to operate means that London based real estate investment trusts are certainly worth considering if you have money to invest. In fact, many would regard these trusts as being ‘as safe as houses’.
Are There Any Alternatives?
However, as attractive as these London real estate investment trusts may be, any prudent investor knows full well that it is essential to weigh up all of the available options before committing to one course of action. So, what are the other avenues that you can take if you want to invest in the London property market? Let’s take a look.
Become a Landlord
If you are looking for a more hands on approach to your investing then you might consider becoming a landlord yourself instead of putting your trust into a trust, as it were. Managing your own property portfolio can be extremely rewarding, but it can also be hard work too.
While you can certainly employ letting agents to handle the day-to-day chores, such as property maintenance and overdue rent collection, you will still need to spend a considerable amount of time on other tasks associated with your property business.
Many landlords wouldn’t have it any other way, but for some the idea of being so involved simply isn’t viable. Full time work and family commitments can often get in the way of successful property management, so schemes such as real estate investment trusts can be a more attractive proposition. Investing ing a good property investment manager is another option.
There have been one or two new ways to get involved in the property market of late; the most popular of which is property crowdfunding. Crowdfunding is a term that has been around for quite a few years now and it has really taken hold since the crash of 2007/08 hit. Small businesses owners and entrepreneurs were struggling to raise capital for new ventures via the traditional banking system, and crowdfunding gave those go-getters a viable alternative.
In a nutshell, crowdfunding is pretty much self-explanatory – you are simply borrowing from a large number of individuals as opposed to a single source via an Internet based third party. Property crowdfunding, however, is a relatively new concept, but the principle remains the same.
Again, Internet based intermediaries gather together large groups of people who wish to invest small amounts of money. However, as you have probably already gathered, in this case the investment is property rather than a business, project, or venture that your money will go towards.
This sounds perfect on paper, but it does come with an element of risk attached that is deemed greater than the other investment routes previously discussed. Property crowdfunding platforms are new and nowhere near as established as their Reits counterparts, and some of these companies’ practices leave a lot to be desired.
For instance, you’ll have no control over the amount of rent being charged, who is renting the property, how it is maintained and managed, or the cost calculations. Add to that the fact that some of these intermediaries can borrow against the property should their revenue not be met, and you can see why many investors are shying away from this type of investment scheme.