The Beginner’s Guide to Property Investment
What is it, and should you be doing it?
Thinking of investing in property but don’t know whether it’s right for you? This beginner’s guide provides a brief overview of how it works and some of the advantages and disadvantages you can expect to encounter if you decide to invest.
What is property investment?
Along with shares, bonds and pension funds, property is one of the most common forms of investment.
The aim is to generate a profit and in the simplest terms, this can be achieved by letting residential or commercial properties to tenants who pay you rent, or by adding value to a property through renovation or refurbishment and then selling it on at a profit. At National Property Portfolio, we specialise in getting investors early access to properties before they are available on the open market. This includes distressed, repossessed properties, and off plan properties.
Many investors consider property a lower risk investment than shares, bonds or pension funds because property is a tangible asset; although its value may rise and fall during a property cycle it will always be useful and will always be in demand.
What are the advantages of property investment?
There are a number of advantages to investing in property. Compared to shares, bonds and pension funds which can be highly susceptible to rapid changes in the global economy, the value of property is relatively stable and more importantly, is something you can exert some control and influence over.
You can add value to a property through renovations and any gains you make will be classed as equity which you can then use to leverage finance with a lender and further your investment portfolio.
However for many investors, the benefits of property go beyond financial gain. Aside from opportunity to secure wealth for the future, it’s possible to establish a level of involvement that suits your lifestyle.
You can hand over responsibility for all aspects of managing your investment to professional third parties and enjoy a passive income from it, or be hands-on and manage your investment strategy and the day-to-day affairs of your portfolio yourself to build a career out of it.
What are the disadvantages of property investment?
Like any form of investment there are risks associated with property. Values can fall, interest rates can rise and there are no guarantees that you will find reliable tenants.
Unlike shares, bonds or pension funds, property investment requires a greater level of financial commitment. If the price of shares falls, you can sell quickly and limit your losses but property is not so easy to dispose of.
Furthermore, the greater level of control you can enjoy as a property investor comes with greater levels of responsibility. As a landlord you have a number of legal obligations to your tenants and fulfilling them, as well as dealing with banks, estate agents and other third parties can be a complex and time consuming process.
Becoming a successful property investor takes time and requires the careful management of your assets and funds, but the team here at National Property Portfolio can help. We offer a range of services that support you through every stage of your investment, from planning your strategy to purchasing your first investment property.
Your investment strategy can be tailored to your needs and objectives. There are a number of different approaches to investment which we have provided useful overviews of:
- Long term Property Investment Strategy
- Low Risk Property Investment Strategy
- Fast Growth Focused Property Investment Strategy
- High Returns Focused Property Investment Strategy
For more information about some of the terminology you might come across when planning your strategy, please read our glossary.
You can find further information about all aspects of property investment in our news feed or contact our experienced advisors directly on 0800 321 3975 who can help with your enquiries.