At present, the property market is booming. Prices continue to rise alongside demand in both the buying and renting sectors. This means that savvy investors have looked to invest their money, widening their investment portfolio and increasing their profits. At present, there seems to be no sign of the market slowing down. However, that doesn’t mean that you shouldn’t be cautious. Here’s what to consider when you’re investing in property.
What Can Property Offer Me?
With properties, there are two different ways that you can make money:
- Buying a property, improving it and then selling it at a profit
- Buying a property and then renting it out to tenants for more than the value of your mortgage. If you like, you can then also sell it at the end of the tenancy, too.
These are the two main ways, but there are other ways you can make money from property, too. For example, you can invest in a property fund that invests in property, or you could invest in a property maintenance and management service. If you’re unsure what’s best for you, consult with an advisory expert, such as Withers Worldwide.
Are There Risks Involved?
Although demand for property in both the renting and selling markets is high at the moment, that doesn’t mean that it will always be the case, and demand can fall as well as rise.
For this reason, you have to be fully aware that property investment is for the long-term. If you’re willing to wait around, you’re able to ride out the losses when the market is shallow. This means that you can wait for times of maximum profit before selling.
To try and mitigate the risks, many people try to diversify their property portfolios, attempting to ensure that all of their money isn’t tied up in buy-to-let property when the housing market is slow. So, if you’re investing in housing, ensure to invest in other alternatives, too.
Things to Look Out For
So, if you’re investing in property, what should you look out for?
- Selling properties takes months, so you can’t take money out quickly like you can with stocks and shares
- Buying a property is a significant financial investment. Make sure you’re confident of your decision.
- There are a number of different fees involved in buying and selling property, so the amount you sell for won’t be pure profit.
- It will require additional investments. Properties require upkeep and maintenance. Factor these costs into your calculations.
Keep these hints and tips in mind and you should have no problems making your property investment a success.