Property Investment

There are so many ways to make money and property is just one investment. Imagine having cash land in your bank account every month for the rest of your life, after having done the work just once. Imagine having a healthy pension pot growing month on month and not having to worry about how much you will have available when you retire.

Overall property has always represented a good long-term investment opportunity and never more so than right now. However, a caveat to that is buying the right investment properties for you in your personal and financial circumstances.

Here are some very good reasons why you may consider investing into bricks and mortar.

The housing shortage

Published in 2004, the Barker Report concluded that the UK needed to build an additional 120,000 new homes every year to keep up with the demand. That figure has not been achieved once. In fact, the housing shortage crisis is worse because the figure that is now being reported is over 300,000 new homes a year need to be built. And as we all know, low supply equals high demand.

Leverage opportunities

No other asset class offers the opportunity to leverage in the way that property does. Banks lend against property at the level that they do because it is seen as having a fundamental “bricks and mortar” asset value. In the UK, property has increased in value by an average of 10.2% per year. History shows that, on average, UK property prices double in value every nine years.

Loans are available

Banks and mortgage companies are happy to provide funds for property investments. The ability to refinance a property means that you, as an investor, can end up with an income-producing asset that doesn’t tie up your own capital. Being able to get to this point will depend on many factors including whether you buy at a good price and how well you add value. This can enable you to re-finance in the future and release the money originally invested. By re-investing that money in another income-producing property, you are expanding your portfolio and maximizing the return on your capital.

Opportunities for everyone

The wide range of opportunities to make money from property investing is exciting and is one of the reasons why so many people use it as a wealth-creation tactic. Property can work for you whether you want:

an ongoing income;
a short-term, medium-term or long-term gain;
a pension plan;
a home for your children in the years to come; or
a lump sum return in the future.

Your money-making options within the property investing world include, but are not limited to:

investing in buy-to-lets for single or multiple occupancy lettings;
renovating properties to either sell them for a profit or refinance and rent them out;
investing in new builds;
buying land to either develop yourself or sell on to a developer;
converting properties into flats;
converting commercial premises into residential units;
running a holiday let business;
sourcing properties;
managing and letting properties; and
running an estate agency.

Recession-proofing

Rented-out properties can provide you with cash flow so you can ride out recessions and uncertainty. After all, people will always need a place to live so property will never go out of fashion.

Control of your own investment

Unlike other investing options, with property you can decide where and how you buy properties and what you do with them. While you cannot control government policies, planning rules and regulations, mortgage rates or the property market as a whole, you

do have the power to control:

the type of properties you invest in;
the type of mortgage product you have;
the type of tenants you have living in your properties;
the amount of rent you charge, depending on market conditions;
the level of renovation work you carry out and the amount you spend;
how you add value to your properties;
how much you spend on maintenance costs each month; and
whether you manage the property yourself or hand it over to a management agent.

Property investing is a business

By putting the right systems and a team in place to source, acquire, refurbish, let and manage a property portfolio, you can reap considerable financial rewards for relatively little time or effort on your part. This can free up your time to either focus on high-value aspects of your business or simply to enjoy some of your favourite pastimes and leisure activities.

Property investing is a business and you need to have the ability to establish and manage your office in a way that works for you. As long as you set it up correctly, your business can function as a money earner, whether you’re there or not.

Property can make you wealthy

Property investing has created more millionaires and billionaires than any other asset investment option. Many business owners, celebrities and sports professionals have land and property as part of their investment strategy. Many people fear the losses they might make in the property market when prices fall. However, bear in mind that they are not real losses unless a property is actually sold. If purchased correctly, a property can continue to generate a healthy cash flow during a downturn in the market and the investment can be sustained until prices rise again.

Property investing isn’t a “get rich quick” scheme. So, if you are looking for a speedy way to financial independence, property investing isn’t for you. Property investing is a long-term game. The amount of income you want to achieve and the timescale to achieve it depends on you.

The time it can take to become wealthy can be as short as 12 months or as long as 15 years, which may seem disheartening. Life has a way of marching on, and then one day, we wake up and realize that 10 to 15 years have slipped by and we wonder where the time went. In 15 years, if you apply just a few good financial habits, you can quietly accumulate many investment properties slowly and steadily.