Why Invest in Property?

The UK property market has had its bumps in recent years, but is still known to be one of the most attractive places in the world to buy.

Investing in property is one of the most common forms of investment, but it's important to know whether it's the right path for you.

However as some would say, there's no safer bet than "good old fashioned bricks and mortar."

Let's check out some of the benefits and considerations that come with investment properties!

1. Control over your investment

Compared to stocks and shares, there’s a lot more you can do to ensure your profits remain strong.

With stocks you can’t do anything but hope and watch the stock market, however simply funding an extension on a property to add extra bedrooms can directly impact your rental income, as can updating the decor, adding amenities and much more.

2. Knowing Your Market

Whilst the financial market can be intricate and complicated, property is much easier to understand and become familiar with. Simply put, everyone knows their own area and can make educated assessments of where is best to invest. Some of the things to consider are where the best schools are, how close shops are, and whether there are good local parks to the property.

Bear in mind that it can be helpful to look at future projects and developments that are planned in areas. For example, if a shopping centre is opening soon in a certain area, this can mean an influx of jobs!

3. Leveraging your Investment

Most landlords have a mortgage on their property and with good reason; with property prices rising and low rates in the market, it can be a more profitable use of funds to buy 3 mortgaged properties instead of 1 property in cash. This also allows one to diversify cashflow. If a property isn’t being rented for a few months, you’ve still got the other two property incomes to rely on.

If you could look to buy an asset yielding 6%, and you can secure a mortgage rate at 2%, its more cost effective to look at using finance.

4. Retirement Plan Alternative

Pension annuity rates over the last few decades have reduced and more investors are turning towards property. With certain areas and types of properties achieving 8% or more, it’s why more people than ever are using property investments rather than your conventional pension plan.

Opting in for a repayment mortgage on an investment property could leave you with mortgage-free investments by retirement. It's always best to speak to your pension adviser regarding what they can offer you as everyone's need and circumstances are different. The value of investments and any income from them can fall as well as rise and you may not get back the original amount invested.

5. Stability is the name of the game

The UK housing market in the UK has been known to be one of the most stable in the world. Of course, like everywhere else, it crashed in 2007 however due to its strength the market quickly rose to pre-recession prices much faster than in other parts of the world.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

Some buy to let mortgages are not regulated by the Financial Conduct Authority