While real estate is considered to be one of the reliable assets for long-term returns, it also has one of the highest barriers to entry. After all, with the average UK house price now topping £260,000, you would need access to considerable amounts of cash to invest in this asset outright.
While you can opt for a loan or mortgage to cover the costs of your investment property, the costs of servicing this debt will represent a significant drain on your ROI for years to come.

However, you do not need to buy property in order to make investments and trades on the real estate market. Here are some of the top ways that you can trade in on the growth of house prices, without actually buying a house. 

REITs

Probably the most common alternative for budding real estate investors, real estate investment trusts (REITs) allow you to invest in the most high-growth property markets in the country for a fraction of the cost. REITs are pooled funds from dozens or hundreds of investors, managed by real estate investment companies who put that money into income-producing properties. The REIT is the fund, which will lease out properties, collect rents, and distribute that rent back to investors. 

Fractional Ownership

You don’t always need to own an entire property outright to be a property investor. Instead, you can opt for a fractional ownership scheme where you and several other investors will each own a “share” in a particular property and have an equal claim to income or sales proceeds from that investment. You can explore a range of fractional ownership platforms that allow you to purchase shares in a property online, even if that property is located overseas.

Real Estate CFDs

One low-barrier way to capitalise on the white-hot property market is to speculate on the shares of the real estate companies that are benefitting most from this growth. As this guide to what is CFD trading explains, you can use a trading platform to trade “contracts for difference”, which allows you to speculate on the future price change of an asset without owning the asset outright. This way, you can speculate on the share price of major UK property companies without having to actually buy shares in that company. 

Invest in Land 

Land has always been considered to be one of the most stable assets for long-term growth, especially in a market like the UK. In addition, land is usually much, much cheaper to buy than property. If you are a particularly savvy investor, you can purchase land in an area where you expect lots of development in the coming years. The price of that land will grow, and you can later sell it for a profit. In addition, buying land and actually building a house on that land yourself can often be cheaper than buying a turnkey property outright. 

With these tried-and-tested investing and trading strategies, you can take advantage of the UK’s booming property market, even if you can’t afford to buy a house right now.