Should you invest in property? The answer isn’t straightforward, as there are various advantages and drawbacks of property investment that you need to strongly consider before dipping your own toe into the water. Here is a run-down of some of the most notable plus and minus points.
Pro: It is a fairly safe and non-volatile form of investment
Naturally, house prices can be prone to fluctuations over the years. However, those rises and dips will rarely be dramatic, making property relatively safe to invest in over a lengthy period of time. Furthermore, money.co.uk points out that, in the long term, property prices should rise – even if they might occasionally hiccup along the way.
Thus, you could find property investment especially attractive if you are new to – or relatively inexperienced with – investing, as little risk is attached. There isn’t much need to fret about the possibility of losing large amounts of money in a short amount of time when you property invest.
Con: You could have to wait a long time for good returns
Of course, there is one obvious problem of property typically not seeing quick and dramatic changes in value. This problem is that it could be a while before selling a property gives you a significant return on what you originally paid for it.
If you invest in property, you very much have to do so for the long term. While you could overcome losses in a struggling housing market if you are willing to wait for the good times to return, property investment is no “get rich quick” scheme. Nonetheless, selling a property isn’t the only way in which you can make money from it, as our next point will make clear…
Pro: You can bring in more money through letting out the property
This can help you in a myriad of ways. The regular income that you derive from tenants could help pay your mortgage and possibly even leave you with extra money afterwards. While the onus would still be on you to find tenants, this task might not prove too arduous if you invest in property where your chosen kind of property is in high demand.
You could, for example, invest in an area where there is a well-regarded university nearby. In this area, there could be significant demand for student-friendly apartments; so, once you have bought a property there, you could market it as available for students to rent. Flambard Williams has investment property consultants who can help you to spot great opportunities for investment in such major UK cities as Manchester, Bradford, Liverpool and Sheffield.
Con: property investment is demanding
A lot of your time and money could be spent on maintaining and managing the property. If the freehold isn’t yours outright, you may have to extend the lease, as the Money Advice Service points out. Negotiating this could take time – and it will add to your already significant costs. Common costs of property investment include stamp duty and land tax.