Property investment is a wise choice for those looking for a long term saving strategy. With a combination of the monthly rent you receive and the potentially huge increase in value of your property, it can be a great asset to consider. Long term savings, like a pension or a property investment, are all about thinking far ahead and being able to weather the storms of the changing economy. However, unlike other investments, at the end of the day, you still own a house. Or a flat, or an apartment, any property really. So, what makes property so good for a long-term investment?
Capital appreciation is the aspect of property investment everyone knows about. The heady heights and plummeting lows of the property market have long been dinner time conversation. Like with any investment, wise property investors can make significant amounts of money by buying a property cheap and selling when it’s at its highest price. There are some impressive examples of UK house prices rocketing, showing that when investors get it right, they really can make incredible profits. House prices in Stevenage grew from £181,475 to £287,692, a massive 58.5% increase from 2007 to 2017. In Hackney, property prices increased by an incredible 936% between 1995 and 2015.
Better with Time
You will notice that the biggest gains are over the longest period of time, which is why a property investment is worth holding on to. Of course, like any asset, property prices can go down as well as up, however the general trend is that property values are likely to go up. This is especially true in areas receiving substantial investment, like Manchester and Liverpool.
The steady income of a buy to let property is the main reason why property investment is so popular. When leasing a property, the owner has access to regular payments from the tenant which can often pay the mortgage, or if you brought the property in cash, pay off the purchase price. Potential investors need to factor in tax implications, charges like ground rent and rental regulations to make sure their investment is worthwhile. However, with rental yields of over 9% with property investment specialists like RW Invest, investors can earn significant returns. With the UK’s population increasingly choosing to live in rental accommodation, there is demand for rental property more than ever before. Because of this, there has also been a significant rise in rental income across the country.
Property investment is often chosen by those who prefer tangible assets they can look at and touch, rather than stock and shares or online currency. No matter what the property market does, you still own the bricks and windows and land. From brand new apartments to old converted townhouses, owning an investment property has always had a certain appeal.
Access to Money
Property investment can also be a great way to make sure your savings aren’t touched. Unlike a savings account, you can’t dip in and out of your property investment. If you want access to your money, you’ll have to sell the property. This can be a negative when you need money fast so it’s worth making sure you can definitely afford to invest in property. You need to know that you might have to wait, and it will cost you solicitors and estate agents fees to access your money. But for reluctant savers, this can be a great way to make sure you don’t spend your savings and keep it until property prices go up and you’re making a significant profit.