It’s been around for as long as you can remember but the expression that investing in bricks and mortar is a safe bet, is something that you still hold true. But if you’re looking to invest, is property still a wise way to make your money work?
We take a look at for and against investing in housing, in this short blog.
There are plenty of professionals out there from realtors to builders who will tell that bricks make the best investment and a quick visit to a mortgage broker, certified mortgage brokers are still in every phone book, will tell that buying is as popular as it ever was.
But what if you’re looking at more than buying a family home but considering a development or going into the buy-to-let game and building a portfolio of properties?
The Argument For
Yes, the markets fluctuate but if you’re buying property, especially to rent out, you’re looking at a generally very steady income. The rates may go up and down but if you’re mortgage-free or have a very low repayment rate then anything you make from renting is profit and over the long-term is often more profitable than quickly flipping a house or apartment for sale.
The trick is to borrow little if any money to buy the property and start off small. When you have a steady passive income coming in, you can turn your attention to acquiring more and more. Research your purchase carefully, you’re looking for a property that has minimal work to do and is a rentable condition without the need for any of the major systems in need of replacing, including the central heating and electrics.
The Argument Against
Investing in property seems like an easy option but in fact it’s not. Unless you are a real expert and have experience in this field, chances are you’re going to overspend on a house and end up losing more than you bargained for.
There are far easier and more straightforward investments you can make, without the need to manage something month-to-month. This idea of passive income can sometimes turn out to be quite the opposite with troublesome tenants and a constant list of repairs to carry out.
In reality the best thing you can do is to play to your strengths when it comes to investing. If you do have experience in property investment, then this is a natural step but if not, there are plenty of other options on the table.
Talk to your financial advisor about how you plan on investing your lump sum and figure out how much risk you want to take on before you commit to anything.
Buying and selling, buying and renting can be fun and provide an impressive passive income, but only if you get it right. Take expert advice and look realistically at the situation before you jump in with both feet. You’ve got money to invest, but make sure it works for you and not against you.
Contributors
