Before you decide upon any business venture, it is important to understand the pros and cons (every business has them) and so today we are going to look at the major advantages and disadvantages of property investment.
Advantages Of Property Investment
You Are The Boss
If you invest in property and want to let rooms out then you become the boss. All the important decisions are now yours such as which property you will purchase, in what area, the amount of rent that you will charge tenants, how you will find tenants for your proerty and how you will keep the property in good shape.
This is very liberating because if you work a normal job the chances are that you are taking orders from someone and you may not think that the decisions being made by the people supervising you are always the right ones. With property investment you are totally in charge of your money and all of the decisions that are required.
Property Is An Asset That Has The Potential To Appreciate
While it is true to say that property prices can go up or down, you are still purchasing an asset. You will be using the power of leverage to borrow the majority of the money required to purchase the property and only investing a small amount as a deposit.
If you buy in the right area and the prices continue to rise then the value of your property could rise considerably without you having to do too much. As an example, you might invest £20,000 as a deposit and then when you sell the property in the future you will make £50,000 profit on the sale. This is a far greater return (even when you take taxes into consideration) than you would get from a savings account in the high street.
Once you have tenants in your property you will be receiving regular income. This income should more than cover the cost of your mortgage and other expenses such as the up keeping of the property. In fact you should be in profit most months. So think about this, your tenants are not only paying your loan but they are providing you with a profit as well. So in affect they are paying for your asset which should appreciate in value.
Most people that have experienced successful property investment don’t stop at one property. They build a portfolio and a huge income stream using the power of leverage. If you know what you are doing then fortunes can be made with this business.
Disadvantages Of Property Investment
It’s Hard Work And Time Consuming
Finding the right property in the right area for the right price with the opportunity of a degree of renovation that will add significant value is a lot of hard work. There is also a big time commitment as it can take a long time to find the right property and then more time to get it looking the way that you want it to.
It Can All Go Wrong
If you are new to property investment then mistakes are more likely to be made. Buying the wrong property, or in the wrong area can mean no tenants and no re-sale. If you do not do your homework properly then you can pay too much for a property and significantly lower your return on investment.
Without The Right Team You Can Fail
Having the right team around you that will share in and contribute to your success is priceless. Most properties will require renovation so partnering with the right trades people is essential. You do not want cowboys or people that will only complete half of the job and then rip you off. You also want a good solicitor onside too who really knows the business and is quick to respond. Then there are the estate agents and letting agents.
Eliminate The Disadvantages By Partnering With Us
Do you just want to enjoy the advantages of property investment without the disadvantages? Well you can if you partner with us at CPG and take advantage of our experience and know how. We know the right areas and how to find the right properties. We have an experienced and reliable team working with us. We do all the work. This is “hands off” property investment for you.
To find out more about our “hands off” property investment partnerships and schedule a no obligation meeting please contact us here.