17 Sep Why Property Investment Is Still a Good Idea
Property is one of the most lucrative investment vehicles about. As an investment, it’s relatively easy to get a grip on the concepts surrounding this kind of asset investment. Once you understand the worth of property investment, it can really support your lifestyle.
Property investment that is done properly leaves cash in your account monthly for the rest of your life. This is after having done the work only once to set up this nest egg. It can provide a pension pot that grows, month on month, year by year, leaving you with no anxiety about retirement funding.
Historically, property has been one of the most stable investments, providing an excellent long-term return. It is no different now than it was a decade or half a century ago. They key now is finding the right investment properties in line with your financial circumstances.
Consider the following when exploring property investment.
There is nothing quite as secure as property when it comes to using property as leverage. Financial institutions readily lend against property as security. They do so at much higher levels than any other asset because property is so tangible. Property continues to increase in value at a breathtaking rate of around 10.2% annually in the UK. Statistically, a property in the UK will double its value every nine years.
Loans are Available
Funding for property investment is readily available. Refinancing provides additional opportunities in which your asset doesn’t have to restrict your investment activity. Your capital remains fluid and you can continue to build on your investments.
Although this will not happen overnight, it will depend on multiple circumstances, including the purchase price and how quickly and easily you can increase the value of your investment too. This provides an opportunity for refinancing even if you decide to keep the opportunity on the back boiler for a while. Refinancing, however, helps you to reinvest in additional income producing property, increasing capital growth.
Huge Shortfalls in Housing Stock
The barker report that was published in 2004 concluded that the UK needs to build 120,000 new houses every year if it is to keep up with current demand. To date, that figure has not been achieved. Not even once.
Because of the failures to fill that gap, it is currently estimated that to catch up on those figures we would need to build about 300 000 homes a year for the foreseeable future. Low housing supplies result in increased demand. The demand is not going to ease any time soon.
Opportunities for Everyone
Property provides a wealth creation opportunity to meet any long term objective. Opportunities include providing an additional pension for retirement, a lump sum return in later years, providing a future home for children, creating an ongoing income source or simply seeking out a short, medium, or long-term investment gain.
Property Investment Leverage
There are so many ways to make money when investing in property. This diversity is what makes it so attractive to investors. Buy-to-let continues to be a good investment, whether it is for single or multiple occupancy tenancies.
Redeveloping a purchased property for profit or refinancing is also a great way to make money when investing in property. Developing in many forms offers opportunity whether it is new builds, developing on empty land, or converting larger properties into several flats.
There is also the opportunity to develop obsolete commercial property into residential units. For those wanting more flexibility with the property, turning it into holiday letting can be a useful option. In fact, owning property isn’t the only way to make money on the property market, estate agencies, for sales lets, and property management is good too.
There will always be a demand for places to live. This means that your property portfolio will recession-proof your investments. Additionally, in times of economic downturn, investors can ride it out while they still enjoy a cash flow generating investment.
Control of Your Own Investment
Property is the one area where the investor has complete control, rather than handing your money over to someone else to invest. It is true that the investor cannot control government planning policies and changes in taxation rules. There is still, however, control elsewhere. This includes the nature of the tenants and rental income levels according to the conditions of the market.
Investors also control how much they spend on renovations and other methods to add value to their properties. A shrewd investor controls maintenance costs and whether to self manage or hand the day-to-day control over to a property manager.