The Advantages of Property Investment and Some of the Pitfalls
A piece about purchasing houses and flats for the purpose of providing yourself with an income and capital gains in the future.
Anybody that has followed the real estate market over the last 2 or 3 years cannot fail to have noticed that investing in bricks and mortar is not a guaranteed way to make money. Nevertheless, among the various choices that people are faced with today, residential properties are well worth considering, especially at current prices. It is understandable that a lot of investors are hesitant to take the plunge when they have watched prices fall recently but this can be the best time to get involved. It is certain better to buy at or near the bottom than to wait until prices have reached the top and then make your move.
However, nobody can tell you with any certainty when the market has reached a top or bottom so there is always a certain amount of risk involved when buying property, as with any other form of speculation. Buy to let deals offer investors a regular income as well though, which can help to cushion the blow if prices should fall in the future. A good-sized deposit makes property investment of this nature a lot easier and can alleviate any worries that those with poor credit histories may have as many lenders are more lenient with customers that put a large amount of their own money into a deal.
Most of the pitfalls, such as the possibility of prices dropping after you acquire a new house or flat, have been covered above but your own financial circumstances also need to be considered. If you are not planning to let your property then you will need to be as sure as you can be that you will have a regular salary coming in that will cover the mortgage payments until you wish to sell. Even if you are planning to find a tenant, it is wise to have a backup plan just in case it takes longer than you think.
People that are worried about having to keep up mortgage payments on an empty house might like to consider buying a property that has a sitting tenant, so there is no need to worry about finding one as soon as the deal is struck. Some letting agents offer a rental guarantee, which is an alternative solution if you want to be sure of making an income from your investment.
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