property investment in birmingham The bull ring Birmingham

Property investment in Birmingham, why is it such a great idea?

As a real estate investor, you probably take a relatively long view of your investments. You expect a good return, and you want that return to continue over the years, both as income and capital appreciation. For that reason, when you invest you take a longer-term view. You want to be as confident as you can be that what is good today will be better tomorrow and great the day after.

The old truism that the three most important things in buying real estate. Location, location, location is not entirely accurate. However if the location is supported by the numbers, then it most certainly is. That is why property investment in Birmingham and its suburb towns should be on your map. The numbers are great!

The Location

Location is not just the address; it is the meeting point for development. The movement of people, rental prices, employment opportunities, transport, proximity to needed services for residents and more. The ideal location might be one where a commitment to development is already in place,. Consequently where more growth is coming and has already been planned and budgeted for. Ideally, where people, the people who will live in your properties are already moving in. You can seek to catch a rising tide that will lift your boat along with those of many other businesses. 

Let the rising tide lift your boat

The tide is already rising in the Birmingham area.

Birmingham is a popular place to live. With a population of 984,000 the city is the second most populous in Britain. The population is growing by over 4000 people per year.

The population is young with people aged 20-24 being 2% above the national average; this bodes well for an increase in the number of homes as couples create families.

Land prices are rising. According to Knight Frank in their Birmingham Real Estate Report, in 2013, land prices per unit were in the range of £12,000-16,000. During 2018 prices rose to more than £35,000.

House prices have risen by around 25% in Birmingham between 2008 and 2018. Other major cities have seen higher rises. This suggest that Birmingham prices have room for further increases as current prices appear relatively low.

Rental Prices Still Rising

Rental prices are rising. According to Knight Frank, 2-bedroom flats have seen rents increase by 25% since 2009.

Will Jordan, Head of Birmingham Residential Development suggests that build to rent (BTR) is now expected to form approximately one-third of new housing with potential for additional supply in the future.

Birmingham residential prices have been rising, but opportunities are arising from nervousness ever Brexit. Variances between asking and selling prices are running at around 10% in London. However only 2.5% in Birmingham suggesting price softening to come.

Investing In Birmingham

Global businesses such as Deutsche Bank, Price Waterhouse Coopers and HSBC are relocating head office operations to Birmingham. This is bringing well-paid employment and new jobs to the city and suburbs. New money means a greater chance of people wanting property

Europe’s largest infrastructure project HS2, with a £56 billion investment, will link Birmingham to London with journey times of just 49 minutes.This makes Birmingham more attractive to high-value employers and for workers to commute to London.

All these reasons suggest that over the coming years Birmingham will continue its transformation becoming a highly desirable place to live, work and study. As opportunities arise, the demand for housing will continue to increase presenting attractive investment opportunities.

How can you benefit from Birmingham’s rising tide?

There are several ways that real estate investors can maximise their returns. As a rule of thumb, you should try to buy ahead of the curve. Try to target up and coming areas, look for properties close to areas that are already receiving investment or undergoing development. Rather than jumping onto a bandwagon and overpaying. Start looking for the next big thing and maximise your gains by spotting opportunities ahead of the herd.

Think further afield than Birmingham’s centre. There are many suburb towns close to and contiguous with the city such as West Bromwich. Along with Oldbury, Smethwick, Quinton, Blackheath, Netherton, Stourbridge, Dudley, Brierley Hill, Aldridge, Sutton Coldfield, Solihull, Halesowen and Wednesbury. Look further afield for your next property investment and diversify your real estate portfolio for maximum profits.

Knowing The Local Marketplace Birmingham

Learn about your market; understand who your clients will be. Will you be renting to young managers and executives, singles, or families? Is your plan to buy to renovate and resell? Think about your market before you buy.  Understand what your market looks for in a property and make sure that you offer them what they want. 

Set a budget that enables you to can make a profit from the deal whether it be through rental income or capital appreciation.

Be realistic about the amount of capital growth or rental income that you can make on any prospective property investment. Use those numbers to work back toward the budget that you have set so that you can understand the viability of the project to attain your potential profit margins.

Plan Your Costs Carefully

Understand your exit costs and account for them in your planning. Learn about the taxation and other costs associated with the investment and include those costs in your business plan.

Take a long-term view. Unless your strategy is to buy off-plan and flip on. Or even before, completion, you should think of your real estate investments as a long-term business. Real estate is relatively slow to liquidate so your investment should not come from capital that you might need at short notice. Understand that, in the short term, prices might go down. Of course as well as up so give your assets time to grow in value before trying to take a profit.

Business Plan Is A Must

Last, but very far from least: write a business plan for each investment. By having a written plan, you will find it easier to stick to budgets. Remember what your goals are and not get distracted by a seemingly attractive proposition that does not meet your requirements. We can help with your property Business plan at GS Property Group. Online Letting Agents

Gurdeep Singh

GS Property Group

Contact Us Today

Birmingham UK

Birmingham to host the 2022 Commonwealth Games. Time To start investing in Birmingham