We have ranked the categories with category Gold being the most desirable as category Gold enjoys the best of both worlds – capital growth and yield thus spreading the return and overall risk. Category Silver is ranked second as the yield is a certain outcome however capital growth is an uncertain outcome being category Bronze.

We’ve found in our experience that investors choose category Gold, Silver or Bronze on personal circumstances but more so on gut reaction. Our advice is to choose all of them! There is no need to place all your eggs in one basket. Property is a relatively safe investment but there is a degree of uncertainty, so if possible, by investing in all the categories above you eliminate some of the business risk.

Identification of Hotspot

So how did we identify the hotspots listed? Well the categories are based on two factors:

1. Actual rental yields
2. Predicted property prices

1.Actual Rental Yields

The first factor, actual rental yields, was easy to do.Actual rental yield is:

ACTUAL YEARLY RENT

ACTUAL PROPERTY PRIC

Since these figures are actuals, we collated all the rental figures from the local letting agents in the chosen city. All the local property prices in the chosen city from our research on the internet. We calculated all the yields being offered from each city based on the equation above. We then eliminated all the poor yielding locations, where we thought tenant demand was low (even if they were high yielding) and all high political risk countries.

2.Predicted Property Prices

Here we did not predict property prices as this is an impossible thing to do. If we could do this we would not be writing this book but buying everything we could in a hotspot area! All we did was to look at what would make an area’s property price rise above the UK average. We came up with the following:

• Proposed transportation link improvements such as improved road and rail links, expansion of local airports and improved public transport.
• Proposed inward investment from private companies, government and trusts.
• Proposed improvements to leisure facilities such as sport centres, parks and shopping centres.
• Higher than average yields
• Recent increases in political stability
• The likelihood of holiday seasons being lengthened for Holiday areas.
• Our own experience gathered from being in this industry and from comments from letting and estate agents

The Seven Types of Investor

What Type of Investor Am I?

So you know you want to invest in property by why and how are you going to invest in property? Well there are many ways to invest in property but we have narrowed these ways down in to seven types. Investors can be broadly categorised into one of the following and it is up to you to decide which category or categories you fit into: