Investing in Property
I know we’re in the middle of a housing crisis where it’s hard enough to rent a place, not alone buy a home. And I know something serious has to be done about it, and fast, from building more homes and yielding unrealistic and soaring house prices, to capping extortionate rents – but that’s another conversation for a different article.
This article is to highlight why people with money to invest, choose ‘investing in property’ to make the ‘most of their money’.
When we talk about how you can make the most of your money, one of the options that will come up is investing in property. Diversification of investments comes into play too. For example, under the right guidance, you might have stocks, shares, savings, and property. In this way you aren’t reliant on just one investment alone to give you a return.
Property is always cited as one of the investments you can make, so let’s take a look at why.
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Investing in Property – 5 Reasons People Do It
1 – Inflation
Everything you invest in should be something that you can hedge against inflation. As the prices for everything rise, it means that the value of your property will rise too. You could see a significant return on your initial investment.
While the cost of living is rising every year, the value of your investment will follow.
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2 – Cash Flow
When you put money into a savings account, you know you are capped on how much interest you will earn back. Buying company shares is a long-term investment that may or may not give you a return.
But one place that will give you a much quicker return is the rental income from a property. Once you have paid the deposit and you have all of the insides of the property ready for rental, you can find your ideal tenant.
Each month you have a guaranteed income that is likely much above the cost of your mortgage. And, over time, the profit margin will increase as the mortgage is paid down.
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3 – Security
Real estate is a long-term investment, no matter which way you look unless you are house flipping – which is a different type of investment. You can hold onto your property for as long as you want.
Buying a property (and having no other issues which cause you to sell it sooner than you’d hoped) is one of the best long-term investments you can make.
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4 – Leveraging Funds
Most people who buy a property can’t afford to buy it outright; leverage means using someone else’s money to buy properties. You take a loan from the bank and pay that back in the form of a mortgage.
Once you have that, you can add your real estate to your holdings without spending all of the cash outright.
5 – Inheritance
Most parents worry that they want to leave something to their children that can help keep them safe and secure when they are gone. Investing in properties is one of the ways that can be done.
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