Although there are many options for investing, property investment is one of the favorites. There are at least 9 reasons why we should invest in property and not other types of investments:
1. The power of “Leverage”
To invest in our properties have the option to not use 100% of our money, but by using other people’s money (OPM). One of the most common source is the money the bank loans. Depending on the country where we are, we usually can get a loan from banks ranging from 70% to 95%. In this case we only need to spend down payment of 5% to 30% of property price. This also means that leverage is approximately 3.3 to 20 times. property investments london
2. Relatively low risk
In general, investment in property is not like investing in the stock market where prices in one day can go down and up quite significantly. Only in certain situations where the economy was bad, property investments may be affected slightly. When compared with other investment types, such as opening a business, saving money on deposit or invested in stocks, property investment has a lower risk than those investments. If we look at the risk compared with income potential, the property has a relatively low risk with good potential income from rents and capital gains.
3. Two sources of income: rental and capital gains
Property investment offers a combination of rental income and capital gains. Investing in property is not only going to give us a positive cash flow but also the potential capital gains depends on property price increment
4. Full control to increase the value of property
If you have a property, you have full control of how you will increase the value of the property. There are many ways that can be done to increase the value of property, ranging from very simple things like painting the property. Other ways are to buy a few accessories or cosmetics, and renovations. These activities are very important especially when we want to rent or sell property. Some people do small renovations to increase the value of the property so that owners can sell at prices much higher.
5. Safe and sure investment in the long term
Property prices usually will not fluctuate so much. In general, it may take some time for property prices change over time. This is different from the stock market for example where prices can change dramatically in the evening.
6. Protection against inflation
Unlike a savings or deposits where interest is given is usually much lower than the rate of inflation, property prices usually follow at least the inflation rate. In this case, investing in property is still a better option to protect them from inflation.