Why Invest in Property
With the end of many final salary pension schemes and the ongoing poor performance of personal pensions, there exists the very real certainty many of us will simply not have enough money to live comfortably in later life.
Property is an investment vehicle like no other.
Over the long term it’s an appreciating asset
If you invest well, your tenants will pay most or more than the cost of ownership and maintenance
You can borrow most of the purchase price
An Appreciating Asset
Property investment offers the best means of building substantial long term wealth in a safe, stable and predictable manner. Unlike the stock market it is almost impossible to lose 100% of a properties value whereas it is relatively easy to lose 100% of a shares value. In the long term property prices have only ever gone in one direction – Up. History has shown that property as an investment doubles in value every eight years. Investing in property is a long term wealth building strategy and as such short term fluctuations in property prices are irrelevant and have little effect on the investments ability to generate strong returns over time.
Leverage or gearing as it is often called is one of the major attractions of investing in property. An investor can generate a high return on the capital invested through borrowed money simply because it is easy to borrow most of a property’s value. Therefore very small sums of personal investment are required to begin building your property portfolio. Because of this the return on capital through property investment can be far higher that through other investment routes. Can you think of any other form of investment which offers the potential for huge returns on investment with a small cash investment?
Ternants Help You Pay
Property is a tangible asset you own and control. Because of this you can affect its ability to perform though through simple measures such as decorating, or adding space. By furnishing the property it is possible to not only increase the rental income but also determine the kind of tenant you will attract. That tenant will then will then pay you rent which will ideally cover the cost of financing maintaining and managing your property investment. Compare this to the stock market where you have no control over what can happen to your investment. You cannot directly influence decisions made on a company’s direction and as such the performance of your investment is very much under someone else’s control. So with an appreciating asset bought with someone else’s money and maintained by monthly income from your tenant, why wouldn’t you want to invest in property?
Property investment can bring many other benefits. For instance, by investing in property in many overseas locations you can benefit from reduced taxation in areas such as rental income and capital gains. In certain cases it is also possible to eliminate taxation all together. Also by investing in property on many overseas resorts you can also enjoy several weeks personal use each year which is a bonus if your property happens to be in a sought after tourist destination. Just imagine if you owned a property in several foreign locations. So we ask you again, why wouldn’t you invest in property?
What is Below Market Value?
A common misconception is that Below Market Value (BMV) property only exists in a depressed market or a market where vendors cannot sell at the current value. It doesn’t.
BMV property has always been available even in the halcyon days of the early to mid part of the new millennium. Many investors just did not look hard enough. If a property is available at a below market value price there is often a suspicion as to why. People often think there must be something wrong with the property or the area which is why it must be being sold on the cheap. This is one of the fundamental mistakes people make when it comes to investing in property.
Those who fail to see the potential of BMV properties simply believe the myths which simply aren’t true. The fact is there are a number of sellers very keen for whatever reason to sell their property quickly and thus offer a discount to do so. We know this because we have built a profitable business with just these kinds of properties.
BMV property simply means property that is being purchased for less than it is currently worth which we firmly believe is the only way to purchase property. Nobody really knows how much property will rise or fall over the next few years, so if you purchase a property with a genuine discount then surely this is safest form of property investment. These discounts will be less in a growing market, but we guarantee they can still be achieved.
Build a Portfolio
If you’re a serious property investor, your aim should be to build a portfolio of properties.
Because most people will own just one property at any one time, these people might benefit from surges in capital growth but they are unlikely to make a living from it. If you are reading this, we can safely assume that your goal is to make money, either by releasing cash from your pension or by investing a relatively small deposit and leveraging (or gearing).
The extent to which you can build your property portfolio, whether it is two or even 10 properties, really depends on three things: time, energy and resources. We offer a service that can help you through every step towards reaching your property goals be it running you own property business, financial freedom, developing a passive income or saving for a comfortable retirement.
It is important to remember that building a property portfolio is a long-term commitment in the broader sense that works best over a minimum of 10 years. There are times when you can buy for capital gain, however this really depends on your risk profile and unless this is done as part of a broad portfolio, it is a high risk investment strategy.
Our experience in property investment means we can source the right below market value property investment opportunities and help you achieve and even exceed your property portfolio ambitions.