Ten reasons why you should be investing in property
Investing in property is a way of diversifying an investment portfolio. The following ten reasons show why you should invest in property.
- 1. Diverse asset
There are many different ways of investing in property. Individuals can buy a property to rent, or they can invest in commercial property or even alternative property investments such as marina berths and car parks. Land investment is also a possibility. For those with a limited budget there are Real Estate Investment Trusts, or property funds.
- 2. Peace of mind
Property is a tangible asset which some investors prefer. Some investors also like the peace of mind that comes from having a regular income from renting their property.
- 3. Stability
There is no other investment that offers what property can offer, which is stability, simplicity and good returns.
- 4. Good returns and less volatility
The Stock Market can offer investors high returns, but many investors find it is a volatile and risky place for their money. This is especially true for investors who are non-professional as there are a number of hidden external factors which can affect their investment. In recent times investors have received a sharp reminder that the value of stocks can go down as well as up.
- 5. Leverage
Property as an investment can be leveraged. If an investor wants to borrow money to invest in stocks the most that they are likely to get is 50 per cent, so they need a larger deposit. In contrast, mortgages on a property can be obtained for up to 80 per cent of the value of the property.
- 6. Purchasing
When investing in real estate, an investor does not have to have the money available to purchase the property. Instead they can borrow the money from a bank and pay back the money from the rental income they receive from their tenants.
When purchasing a property as an investment, it is possible and indeed desirable, to divorce emotion from the purchase. A property should be viewed simply as an investment vehicle. A buy-to-let arrangement can generate income from rental and if chosen wisely the property can also increase in price.
- 7. Equity
If a property is owned by an individual they can release equity against the property. In general, a well-maintained property will increase in value if it is in a reasonable area. This means that an individual can obtain capital without having to sell their asset. If the property is in a bad condition when it is bought and the purchaser renovates it, then it can increase considerably in value.
- 8. Insurance
When purchasing a property, individuals can not only insure the contents and the building, they can also take out insurance against any damage or loss. Landlords can take out specialist landlord insurance against damage caused by their tenants, or loss of rental income.
- 9. Control
Buying property gives an individual direct control over their investment. The property can be sold when they want to and a buy-to-let landlord can increase the rent when necessary.
- 10. Simple investment
Anyone can invest in property and the property market is one of the easiest markets to understand. The purchase process is also relatively straightforward. For those who want to find out more about investing in property there is plenty of information available.