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.
A few years ago, when the financial crisis hit us hard, I remember property prices dropped like crazy real fast! It was the perfect time to buy, for investors! It was also a desperate time for people who couldn’t afford paying mortgages anymore, so they had to sell. My parents, however, refused to sell anything and tried to supplement their income by renting. As difficult as it was to find good tenants, the effort was worth it! Like you said, having universities nearby helped a great deal 🙂
Hello,
Property investment is a good investment resource, particularly for those investors who do not want to take risks of investment money in the financial markets. However, property investment is good as a long term investment avenue. Its pretty safe with good returns margins. A very well explained post indeed. Thanks for sharing.
Managing rental property and dealing with bad tenants is a lot of work. Taking tenants to court is a nightmare, especially in tenant-friendly states in the US!
Before investing, you should know your purpose and the likely time in the future you may have need of the funds. If you are likely to need your investment returned within a few years, consider another investment; the stock market with its volatility provides no certainty that all of your capital will be available when you need it.
If you haven’t lived in an apartment before you may not be familiar with strata fees. These are the regular fees paid toward the management of shared facilities in a strata titled property.
Whether you are an accidental rental property owner or planning to make it your main source of income, you will sooner or later face the need to choose a managing agent for your property.
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 One benefit, if you could put it that way, is that in recent years property values have seen minimal growth overall and in some areas they have declined.
Thank you very much for post the article. Really, it’s very good. I learnt a lot about this. I’ll try to apply your ideas and tips as well as
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Very Informative post indeed we’ll, in general, know about various Pro’s of having a property, it was really good to know about some Con’s that can be there. Thank you for sharing this post.
Thank you so much for valuable information on real estate
Thank you very much for post the article. Really, it’s very good. I learnt a lot about this.
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Thanks for highlighting you thought on the investment in property. Every kind of investment has its pros and cons. So, one should be very careful while invest in such kind of business to make a profitable deal. Research is the key to get a profitable deal. So, prior to investing in real estate, one should inspect different types of factors which influence the investment. In my point of view, a passive investment in real estate business through crowdfunding and real estate investment company are the most secure and stress-free way of investment. However, the reliability of the company needs to be inspected prior to such kinds of investment.
Interest on a rental property may take several forms: mortgage interest, points and loan origination fees, interest on credit lines and unsecured loans for the property, and in some cases interest from credit cards used for property-related expenses.
Great Post, what are you thoughts on when its the right time to hire a property management company I have a small portfolio of 7 properties
A very informative article, listing out the pro and cons of property investment. Property investment can be time consuming and you should be ready for that.
In some places, assessments are conducted regularly, while other places go decades without an assessment and people in the area would love to pay lower taxes based on a re-assessment of their home’s market value.
Thank you very much for post the article. Really, it’s very good. I learnt a lot about this. I’ll try to apply your ideas and tips.
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Beautifully defined! Good article. Property investment is the best investment one can make. Keep on sharing.
Hello Pauline, Great article! Property is a well-known venture decision for all people but deciding if it is the right place to invest your hard-earned money can be a difficult one. One of the biggest advantages of investing in property is that It can generate positive cash flow for you and It is a stable investment for everyone. Thank you so much for this precious information and I really appreciate this one.
I like the way you have dissected the real estate industry. Many individuals only look at the pros of investing in real estates but they forget that there are cons too. Am sure after reading this post many will have a better understanding of the property market.
Good work!!
thankyou for sharing such an good quality of information