Property is a powerful way to make money and is just one investment vehicle that has the potential to be extremely lucrative. It can generate an ongoing passive income and prove to be a robust long-term investment providing its value increases exponentially over time.
If you are wondering whether property is a good investment for your professional development or whether it will benefit your asset portfolio here are some reasons
In recent years since the EU referendum, the property market has appeared unstable, leaving many investors cautious about where to entrust their money. However, one of the most notable advantages of the property industry is that it provides a level of stability and certainty to your investments despite the introduction of variables including Brexit and stamp duty tax hikes.
Real estate provides investors with long term financial security as property appreciates over time, however there is no guarantee the value will increase indefinitely, highlighting why it is essential to research the location before committing yourself through contractual agreements.
Andrew Carnegie, entrepreneur and business leader listed property investment as one of the smartest ways to invest in your future, as well as being one of the most reliable sources of investment. Property presents itself as a tangible asset that can be understood and controlled once you’re familiar with the industry.
One of the biggest positives of investing in buy to let is that you can earn an income via two different routes. One way is paid rent through the tenant and secondly through capital appreciation. Capital appreciation takes into consideration a number of factors, but location is key. Area dependant, urban cities or towns with a wealth of educational facilities tend to reap higher income because the demand is always strong and if sourced correctly, you can secure a continuous flow of income over a long period of time. Paid rent through a tenant can be via either a single tenancy or a house with multiple occupations (HMO). An HMO can be a good investment as not only do you get the advantage of letting multiple rooms so benefit from a higher yield but they are also a popular choice with students and young professionals. So an HMO Manchester, for instance, could reap a high income not only due to multiple occupants paying rent but also due to the location being city-based with multiple students needing affordable accommodation.
Numerous property hotspots across the UK are experiencing masses of regeneration schemes, leaving the areas in severe demand which leaves property prices and rental yields soaring.
Renting property is currently a popular trend, and there are less chance of experiencing void periods in your letting. With this being said, if a unit remains unoccupied, the loss of rental income during that period may be outweighed by long term appreciation of the property.
Investing in buy to let serves as a fantastic opportunity as the cost is typically of lower value than a house, meaning that purchasers are more likely to buy in bulk and diversify their portfolio more effectively, not to mention the opportunity to invest in multiple rental properties at once. Obtaining multiple properties increases your positive cash flow and strengthens your real estate investment portfolio.
Capital values grow at a higher rate than money. For example, if you chose to place £20,000 into a building society, and the account is paying 4% interest, over the next year you would earn around £800 excluding tax. However, at the end of the year your initial £20,000 still stands at the same figure. Moving on, let’s say you place your money into property instead, a modest home in a reasonable area, predictions show that due to long term trends in capital value, the area is almost certain to increase dramatically over time.
According to Nationwide statistics, house prices have increased on average around 8% per year since 1993, therefore there is no notable reason to assume that the trend in capital growth is not set to continue over forthcoming years. What’s more, if purchasing a property with buy to let in mind you will receive a rent as a main income as well as the opportunity for capital appreciation. RW Invest property specialists, based in Liverpool, offer a diverse range of buy to let opportunities across numerous UK hotspots.