• Twitter
  • Facebook
  • LinkedIn
  • Mail
  • Call Me Back
  • About
  • Calculators
  • Contact
📞 Call us on 0330 223 42 52
Investment Property Partners
  • Home
  • Property Investment
    • Commercial Property
    • Buy to Let Property
    • Overseas Property
    • Student Property
    • UK Holiday Homes
    • Development Land
  • Services
    • Property Investment Advisory
    • Property Asset Management
    • Landlord & Tenant
    • Property Management
    • Property Training
  • Finance
    • Finance
      • Commercial Property Finance
      • Bridging Finance
      • Development Finance
      • Peer-to-Peer Lending
      • Buy to Let Mortgages
      • Investment Calculators
    • Insurance
      • Property Insurance
      • Commercial Property Insurance
      • Buy to Let Insurance
  • Training
    • Valuation & Performance
    • Law & Finance
    • Ownership & Diversification
  • Knowledge
    • Property Investment
    • Development & Construction
    • Finance, Valuation & Tax
    • Overseas Property
    • Landlord & Tenant
    • Property Law & Compliance
    • Investment Calculators
  • Search
  • Menu Menu
You are here: Home1 / Property Investment2 / Ground Rent Investment – Investing in Ground Rents as an Alternative...
Ground rent investment

Ground Rent Investment – Investing in Ground Rents as an Alternative Strategy

If you are an active property investor reviewing the alternative investment vehicles available in the property and real estate investment arena then you may have already come across ground rent investment opportunities. If you are looking for super high returns (and the super high risks that usually accompany them) then investing in ground rents is probably not for you. However, if you are searching for more solid, steady returns and an opportunity to diversify your property portfolio then investing in ground rents could certainly be worthy of further investigation.

Investment Property Partners property investors guide to investing in ground rents reviews a number of issues that you may wish to consider if you are reviewing ground rent investment opportunities.

Investing in any form of property or land requires lots of drive, determination and personal courage… and let’s face it, it’s a risky business and often requires serious financial outlay and plenty of hard work for you to be successful.

The main types of direct property investment are generally commercial property, residential property and land, but there are also other opportunities open to investors that include investing in ground rents.

Investing in ground rents is however something many people have never heard of… so what is it and what does it involve?

What is a Ground Rent?

A ground rent describes the full ownership of a portion of land where a second party, normally a leaseholder, owns a long-leasehold agreement on the said land.

The leaseholder is typically the owner of any buildings or structures on the land and will be responsible for any rents relating to the building or buildings.

For the buildings to remain on the land, the leaseholder pays an agreed ground rent to the freeholder.

Therefore in simple terms, the freeholder receives a ground rent from the leaseholder who has buildings on that land.

How Long do Ground Rents Last?

There will normally be a lease in place usually for a term of between 20 and 999 years, although in the UK a period of 99 years is probably the most common.

Ground Rent Investment

A ground rent investment is a good opportunity for certain property investors, with specific investment objectives and under the right circumstances.

From an investment perspective, experience shows that it is possible to generate a return of around 5-10 per cent per annum on a ground rent.

Of course, returns at this level aren’t going to make you super rich in an instant, but what avenue of property investment does without significant risk?

Instead, investing in ground rents can be used as a lower risk way to diversify a property portfolio, which is particular important when it comes to the management risk in investment circles, especially if you want to be successful for the long term.

Investing in Ground Rents for Income & Capital Growth

A ground rent investment can involve both commercial and residential property and is often one of the easiest property investment vehicles to be involved in, as a lot of the hard work is taken off your hands by the leaseholder.

With regards to success, many investors have found the ground rent investment path to be very fruitful for them…. However, it has to be said that the options for generating greater financial returns in the long term and making increased profits year on year are not going to be as great.

The reason for this is simple… other forms of direct property investment allow you to make strategic changes to the buildings or the leasing profile of a property to increase either its income or capital value, but with ground rents you will own only the land which limits your ability to add significant value.

The buildings occupying the land belong to the leaseholder, so there is usually no scope for improvement by you and consequently no scope for future financial gains during the term of the lease.

Ground Rent Investments Offer a Safe but Steady Income

Many investors look to add value to their property investments by carrying out building improvements, refurbishments, extensions, redevelopments and possibly improving the tenant mix and the strength of any lease.

As this is not possible with ground rents they are probably not the best option to take if you want to see strong income or capital growth from your investment.

Instead, ground rents are ideal for property investors who want a relatively safe but steady income stream.

These benefits make ground rent investments an attractive asset class particularly for larger portfolio owners.

Property Investment Solutions

As a leading independent property and land investment specialists Investment Property Partners offer expert advice and support to clients across our specialist areas of expertise helping them to achieve their investment objectives.

If you are a property investor searching for ground rent investment opportunities, commercial property, residential or overseas investment opportunities please contact us today to discuss how Investment Property Partners can help you.

Contact Us Today

Further reading…

More information about ground rents, valuations and investing in ground rents… here →

https://en.wikipedia.org/wiki/Ground_rent

Tags: Ground rent investment, Ground rents, Investing in ground rents, Property investments
Share this entry
  • Share on Facebook
  • Share on Twitter
  • Share on WhatsApp
  • Share on Pinterest
  • Share on LinkedIn
  • Share on Tumblr
  • Share on Reddit
You might also like
Commercial property investment All About Real Estate Investing
Buying property in Spain Buying Property in Spain – Spanish Property Buyers Guide
Buying property in Turkey Buying Property in Turkey – Turkish Property Buyers Guide
Buy to let properties and selecting the best locations Buy to Let Properties – Selecting the Best Locations
Sheffield property investment - buying investment property in Sheffield Sheffield Property Investment – Buying Investment Property in Sheffield
How to sell property at auction How to Sell Property at Auction – Guide to Selling Property at Auction
Buying property in Florida USA Buying Property in Florida USA – American Property Buyers Guide
REITs - UK Real Estate Investment Trusts REITs & UK Real Estate Investment Trusts – Property Investors Guide

Search…

Property Knowledge

  • Property Knowledge
  • Property Investment
  • Development & Construction
  • Overseas Property
  • Finance, Valuation & Tax
  • Landlord & Tenant
  • Property Law & Compliance
  • Investment Calculators

REVIEWS

4.8
Rated 4.8 out of 5
4.8 out of 5 stars (based on 13 reviews)
Read our reviews

What’s New

  • Customer Reviews for Investment Property Partners

    Customer Reviews for Investment Property Partners
  • Commercial Property Investment – Guide to Investing in UK Commercial Properties

    Commercial Property Investment – Guide to Investing in UK Commercial Properties

    If you are a property investor considering commercial property …
  • Manchester Property Investment – Buying Investment Property in Manchester

    Manchester Property Investment – Buying Investment Property in Manchester

  • Gross Development Value (GDV) – Property Developers Guide to Financial Appraisals

    Gross Development Value (GDV) – Property Developers Guide to Financial Appraisals

    Gross development value, or GDV as it is commonly …
  • Property for Sale

    Property for Sale

    Search for investment property for sale in the UK, …
  • Buying Land for Development or Investment

    Buying Land for Development or Investment

    With a saturated UK housing market, it is hardly …

Popular posts…

  • Gross development value Gross Development Value (GDV) – Property Developers Guide to Financial Appraisals
    Gross development value, or GDV as it is commonly known...
  • Property yield, calculating yields and return on investment Property Yield – Calculating Property Yields & Return on Investment (ROI)
    For property investors the intelligent analysis of the...
  • Parry's valuation and investment tables Parry’s Valuation & Investment Tables for Property Investment Appraisals & Valuations
    Richard Parry’s Valuation and Investment Tables were fi...
  • REITs - UK Real Estate Investment Trusts REITs & UK Real Estate Investment Trusts – Property Investors Guide
    If you are a property investor and are reviewing opport...
  • Residual method of valuation Residual Method of Valuation for Land, Property & Development Appraisals
    In property development circles the residual method of...
  • Commercial property valuation using the profits method Commercial Property Valuation Using the Profits Method
    The profits method of property valuation is typically a...

Investment Property

Investment Property Partners is a world leading independent real estate and property investment specialist focused on delivering exciting income and capital growth opportunities to private individuals, wealth management specialists, corporate and institutional property investors.

Our expert property investment advisory services are delivered to clients throughout the United Kingdom, Europe and internationally. Combining unparalleled experience, comprehensive capabilities, in-depth research and access to extensive market networks, the experts at Investment Property Partners have the experience and expertise to help you.

Expert In…

  • Property Investment
  • Investment Advisory
  • Property Services
  • Property Finance
  • Property Insurance
  • Property Training
  • Property for Sale

What’s New…

  • Customer Reviews for Investment Property Partners

    Customer Reviews for Investment Property Partners
  • Commercial Property Investment – Guide to Investing in UK Commercial Properties

    Commercial Property Investment – Guide to Investing in UK Commercial Properties

    If you are a property investor considering commercial property investment …
  • Manchester Property Investment – Buying Investment Property in Manchester

    Manchester Property Investment – Buying Investment Property in Manchester

  • Gross Development Value (GDV) – Property Developers Guide to Financial Appraisals

    Gross Development Value (GDV) – Property Developers Guide to Financial Appraisals

    Gross development value, or GDV as it is commonly known …

London

1 Berkeley Street
Mayfair
London W1J 8DJ
0330 223 42 52
[email protected]

Manchester

Pall Mall
61 – 67 King Street
Manchester M2 4PD
0330 223 42 52
[email protected]

GET SOCIAL

Connect with us...

Twitter   Facebook   Google+   LinkedIn

© Copyright 2021 - Investment Property Partners
  • Twitter
  • Facebook
  • LinkedIn
  • Mail
  • Home
  • About
  • Careers
  • Environment
  • Privacy
  • Terms
  • Reviews
  • Sitemap
Land Investment, Building Plots & Investing in Land for Profit Land investment and building plots Tenancy agreements, Assured Shorthold Tenancy, Regulated and Assured Tenancy Agreements – Assured Shorthold Tenancy, Regulated & Assured...
Scroll to top

This site uses cookies. By continuing to browse the site, you are agreeing to our use of cookies.

Learn moreOK

Cookie and Privacy Settings



How we use cookies

We may request cookies to be set on your device. We use cookies to let us know when you visit our websites, how you interact with us, to enrich your user experience, and to customize your relationship with our website.

Click on the different category headings to find out more. You can also change some of your preferences. Note that blocking some types of cookies may impact your experience on our websites and the services we are able to offer.

Essential Website Cookies

These cookies are strictly necessary to provide you with services available through our website and to use some of its features.

Because these cookies are strictly necessary to deliver the website, refuseing them will have impact how our site functions. You always can block or delete cookies by changing your browser settings and force blocking all cookies on this website. But this will always prompt you to accept/refuse cookies when revisiting our site.

We fully respect if you want to refuse cookies but to avoid asking you again and again kindly allow us to store a cookie for that. You are free to opt out any time or opt in for other cookies to get a better experience. If you refuse cookies we will remove all set cookies in our domain.

We provide you with a list of stored cookies on your computer in our domain so you can check what we stored. Due to security reasons we are not able to show or modify cookies from other domains. You can check these in your browser security settings.

Google Analytics Cookies

These cookies collect information that is used either in aggregate form to help us understand how our website is being used or how effective our marketing campaigns are, or to help us customize our website and application for you in order to enhance your experience.

If you do not want that we track your visit to our site you can disable tracking in your browser here:

Other external services

We also use different external services like Google Webfonts, Google Maps, and external Video providers. Since these providers may collect personal data like your IP address we allow you to block them here. Please be aware that this might heavily reduce the functionality and appearance of our site. Changes will take effect once you reload the page.

Google Webfont Settings:

Google Map Settings:

Google reCaptcha Settings:

Vimeo and Youtube video embeds:

Other cookies

The following cookies are also needed - You can choose if you want to allow them:

Accept settingsHide notification only