For many people, the most prudent way to invest their money is to simply put it into a bank account. However – the number of people who have become wealthy through investing their cash in a savings account is extremely low – if not non-existent. It takes a more prudent approach to ensure that your capital works hard. That is one of the reasons that people build up portfolios of investments – and why most of those portfolios have a healthy dose of property assets.
But, why property? What makes the property so attractive to investors? There are a number of reasons.
The property provides the peace of mind that can only come from owning a physical asset. Property is land – and bricks and mortar, it is something you can see and touch. Investing in stocks may provide returns – but at the same time, it may lead to disaster. There are many examples of companies that have listed on a stock exchange and then simply folded within the medium term. Property investment does not do that. It is a solid, physical asset that will always provide returns.
Those returns can be in terms of a rental income – which may allow the owner to offset mortgage costs, or it might be the sale of the asset. Whichever approach is taken – there is very little possibility of the asset depreciating to such an extent that it is worth nothing. That is another thing about property investment. Property tends to ride out tough macroeconomic times or global economic hiccups. For those property investors who are willing to take the long term view, it is almost certain that the correct property investment will provide superior ROI when compared to other asset classes.
Another advantage of investing in property is that the value of that property can be leveraged to provide collateral for access to further funds – which may assist the investor in either further diversifying their portfolio – or exploring further property purchases.
Property has been an investment choice of savvy investors for generations – and it remains so because it simply makes sound financial and investment sense.
Are You Looking For A Successful Property Investment Guide?
It takes some careful planning if you want to be one of the people that makes money in property investing instead of losing it or just breaking even. If you’re truly hoping to make it, then you need to pick up every single tip or piece of advice you can possibly get. Keep reading for a brief yet helpful successful property investment guide.
Before you start doing property investment, choose the specific kind of property investing that you would like to get involved in. You might find real estate flipping to be a great fit for you, or you might like something a bit more challenging. Every scenario requires different skills.
If you want to start investing in retail, commercial, or industrial and warehouse properties, then there are a few things you should know first. To start with, don’t ever pay a premium just for dirt. Secondly, don’t overpay for a business. Think hard about the specific ‘as-is’ value of a property and what kind of rental income you might could get from it without having to sink a lot of money into it. If the numbers line up, then it should be the right purchase.
Location is often a bigger factor in property value, more so than what the property itself has. So, always look over the entire neighbourhood before you choose to invest in a particular property. Some neighbourhoods are just obviously better values than others.
If you wind up deciding to lease or rent properties out to tenants, then you need to screen them thoroughly. Generating an income stream from a property while preserving the property value or even watching it grow over time is a classically successful property investment strategy. However, it’s only going to work if you have dependable tenants that take care of the property while they are on it and pay their money to you on time in full. Too many times you might wind up having an unreliable or irresponsible tenant that is constantly behind on the money they owe you or do expensive damage to your property. Always check the references and credit ratings of potential tenants, and look into their criminal background as much as the law will allow you. Due diligence is necessary if you are going to find dependable tenants.
Given all that you’ve read here, you should know that you’ve just finished reading a successful property investment guide. These brief pointers are just the tip of the iceberg though, so keep reading and learning to get even more information and wisdom you can use to grow your property investing acumen. With enough work and little luck, you will find and create successful property investment deals and opportunities.
Learning About Brexit’s Impact On Property Investment
The UK has been planning to leave the EU since 2016, and without a clear plan as to how the country will depart after 29th March 2019, the EU and UK agreed to push the deadline to 31st October 2019. Theresa May faced a no-confidence vote and repeatedly saw her withdrawal deal proposals rejected in the House of Commons. This necessitated her to stand down with the country needing a new Prime Minister and a compromise deal with just over four months left. With so much uncertainty surrounding Brexit, it’s still unclear how it will affect the UK property investment market. Some of the possible outcomes include:
With the political mayhem in Westminster ever since the 2016 EU referendum, the housing market has recorded its lowest sales for over a decade. 2018 saw the slowest house price growth across the UK, increasing by just 1.02%. The 2018 housing market was subdued and more of the same is expected in 2019. Over the Brexit period, some areas across the country have seen a slump in initial property values. This is good for investors who wish to acquire property given how the market is bound to recover. Property investment is cyclical and getting in on the action before the Brexit vote can be an excellent long term investment.
Places like London have seen rental yields shrink with private and public investors taking to places like Liverpool, Manchester and Luton. This influx of investment has seen tremendous improvement in their transport links and infrastructure. With the imbalance of supply and demand in the UK’s property market, the government pledged to build 300,000 new houses by the mid-2020s. This flurry of property investment in regional hotspots has given the construction industry and developers the chance to combat the national housing shortage and increase the house price growth over time. Also, affordability in major cities is a concern making workers increasingly likely to go to commuter towns such as Luton to look for opportunities.
Property Price Slump And Foreign Investment
Towards the end of December 2018, amid political uncertainty in Westminster, there was a 19% house price fall. This initial slump isn’t that bad with the long term picture painting a steady property price growth across the UK within the next five years. This slump has seen foreign investment into the UK property market remain particularly high with top-end properties continuing to sell. External investors are looking to take advantage of the weakened pound due to the downward trajectory of the pound since June 2016. Regional hotspots are benefiting from these massive injections of foreign and domestic capital. The HMRC revealed that in the year following the Brexit vote, there was a 50% spike in prime property sales.
With Boris Johnson set to take over as the new PM, we can only hope he can lead the country to a formal agreement with the European Union. If the MP’s are still on an impasse, then it would necessitate a new public vote via referendum or general election. However, people should have faith in the UK property market and its ability to weather the Brexit storm.