Why invest in property
What would you do if you had money to invest? Would you start a business or invest on the stock market? Many people do, and many see their investments grow. Yet investments are, by their very nature, unpredictable. The highest rewards are usually only achieved by taking the greatest risks. It’s no wonder then that more people choose to invest their money in property. Investing in property might not always deliver the comparable rewards of the stock market, but it can still deliver generous and sustainable rewards without the risks over a longer term.
A cursory glance at the Times Rich List supports this point. 40 per cent of the people on that list made their wealth through property. The other 60 percent invested their wealth in property in order to build and protect the wealth they created through other ventures. The list proves conclusively that more self-made millionaires attained their fortunes through property than through other types of investment.
We are all living longer, and will increasingly have to be self-reliant as we reach older age. Therefore, it’s important that we do something about this situation before it’s too late. Pensions are unlikely to be able to provide a comfortable standard of living, so we need to look to invest our money elsewhere.
Now, you could invest your capital in a business or on the stock market, but this type of investment carries a higher risk. Property investment on the other hand can offer equally rich rewards with fewer risks. In fact property investment is the perfect financially rewarding option for risk-averse investors. Yes the market may not be as lucrative as it once was, but property investment is a safe and secure long-term investment. The property market is cyclical and recent signs of recovery suggests the market will pick up again and start to deliver higher returns.
The advantage of property investment is that you can do it using other people’s money. With a mortgage or other lending, you can achieve much greater rates of return than you could if you invested in stocks and shares. You will have to pay interest on the money you borrow, of course, but the beauty of property investment is that these costs will be covered by the rental income of your tenants. Money generated through rental income will help pay for the interest and any extra can either be saved or re-invested. Providing you keep your property occupied, which should be achievable in areas of high rental demand, such as City centres and commuter belts.
What can you achieve by investing in property?
- Earn a higher return on your cash, than if you left your money sitting in a bank.
- Build a portfolio that will give you enough income providing you with financial freedom which can pave the way to early retirement.
- Earn more money to improve your lifestyle.
- A hands-off investment that requires minimal time and effort.
- High yielding returns on capital.
- To invest for your children’s future
- A safe and secure investment
What is vital is that you have a carefully-considered strategy. You need to know what you are trying to achieve from investing in property. This knowledge will help you plan your investment and help you achieve your financial goals.