Why you should invest in UK Property. And a few reasons why you shouldn’t.
Posted on 1st January 2021 at 16:52
If you’re looking for somewhere to invest your hard-earned savings, property can often seem like the ideal solution; bricks and mortar provide a safe investment opportunity with a guaranteed profit, right?
As with any investment opportunity, property does come with its own inherent risks.
If the idea of buying property as an investment strategy is a tempting prospect, there are a few things that I’ve learned throughout my career in property investment that may be of value to you and which you should be aware of.
I do not want to put you off the idea of investing in UK property, but if you’re going to go it alone, I think it’s worthwhile going in with your eyes wide open. It is important, with any investment, to understand the pros and cons, the advantages and pitfalls, the rewards and potential penalties.
The attraction of investing in property
I have been investing in UK property since I was 25. I enjoy the rewarding feeling that I get when I turn a tired, unloved property into a beautiful, safe and affordable home for young tenants at the start of their promising careers. This objective, along with the desire to make a healthy profit, gives me a clear vision and set of values that guide any property investment decisions that I make.
You may have different motivations for making an investment in property (read my article on Investment Strategies).
Whatever your motivation or reasons for making an investment, here are some good reasons why property, and UK property in particular, offers good opportunities for an investor:
The value of a property usually increases over time, making it a good long-term investment as well as a source of regular rental income.
A current – and increasing - lack of supply and an increase in demand is creating a tangible need for more rental properties.
By investing in the right location, demographics and property type, you can find a property investment which gives a good instant return whilst being low risk.
A long-term investment in property can mitigate the effects of inflation, as its value increases along with the rental income amount.
Property diversifies your investment portfolio, allowing you to better manage, or even reduce, your risk.
Lower interest rates make borrowing more attractive, as the cost to borrow decreases along with the interest rate.
The dangers of property investment
As with any investment, there will be inherent risks involved. It is important to, and I would advise you to, consider the possible risks, particularly within the context of your individual situation. The risks or dangers of investing in property mentioned below can negatively impact your investment, making it less tax- or time-efficient than originally assumed.
My advice to anyone considering investing in property is to do what I did; do your homework thoroughly.
I’ve found property development to be exciting and rewarding but, like anything else that’s worthwhile, it comes with risks, costs and at the price of hard work – there is no such thing as a free lunch.
If you are still interested in making an investment in UK property, first seek advice from a financial expert or from someone with experience in developing a property portfolio as an investment. Knowing the potential pitfalls and understanding how you can mitigate against their effect from the start can help you achieve the results you are looking for.
And, of course, if you’re looking for a reliable investment partner that can earn you substantial return on your investment, whilst allowing you to learn along the way, get in touch with JIMENY.
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