Reasons Why You Should Consider High Yield Brownfield Investment
Brownfield is defined as the redevelopment of used commercial or industrial land or properties, which during the years have depreciated in value. Although the land or properties depreciated, it can still be redeveloped or used for other economic activities. The lands potential that is ready for redevelopment could be faced with challenges such as contamination, pollution, and even hazardous climatic conditions. Brownfield redevelopment occurs in urban sites and, the term ‘brownfield’ is a common term for urban planning.
Investing in brownfield lands yields higher return and low risk than other estate investment especially in the UK. The United Kingdom is hard pressed for more new homes for the ever-increasing population.
Investing in UK brownfield investments has its merit and demerit. However, it has more merits than demerits.
Merits of UK brownfield
The is the second country with the densest population in Europe. The demand for new homes increases high yield returns when you invest. Big investors, as well as small investors, can invest as the land is divided and sold to as many investors as required. The UK offers agricultural areas, wooded areas, and farmland, for investment and development.
The increased population caused mostly by migration combined with other factors, gives a great opportunity for long-term investors to gain over time. In a single development, you can take advantage of growth potential by investing and in return, records of profit will be high and risks will be low. Furthermore, since the land is divided and sold to other investors, you don’t have to bear the cost of redeveloping the land alone.
Demerits of UK Investment
Like every other developing project, the initial cost can be scary and discouraging. The initial cost entails; legal cost to a solicitor, payment to source tenant, cost for the governmental stamp, and cost for furnishing the property.
Initially, all the cost listed above are paid at the beginning of the development project. However, there are other costs that are continuous, that is, they to be paid at a given time annually. Such cost includes; payment to source tenants which can be twice a year or so depending, maintenance or upkeep dues, electrical bills, the cost for landlord certificate for boilers (especially gas), communal dues, fees for management agent, and council tax dues, especially when the land or building is left unoccupied.
There are other costs to consider. If your tenant refuses to pay rent when due, a problem will arise as your income will reduce. Also, there should be money left aside in the case of damage to properties, either caused by tenants or natural elements such as; flood, earth quake, land slide, storm etc.
Although, when considering all the costs, you might feel discouraged. Fortunately, when investing in the UK brownfield investments, you will not be the only one to bear the cost, hence, the reason why it yields high profit and low risk.
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