Invest Property
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Why would you invest in property?
Nowadays, sensible people are always looking for something in which to invest what precious little financial resource they have available to them. There are a number of competing choices which make it difficult for the bewildered investor to decide what is best. There are stocks and shares, foreign exchange trading, gold bars, bonds and no doubt, an endless array of other options. And, of course, there is property, both commercial and residential.
So, why would anyone choose to invest in property, particularly as the market appears to the uninitiated to move up and down with alarming speed? Clearly property prices do increase and then there are periods when they decrease. Overall, the trend for property prices in most parts of the world is to increase.
Historical trends in property
It is an established fact that there are more millionaires created through property investment than any other route, although internet marketers and smart phone application developers may be running them a close second.
Historically, property in the UK doubles in value every ten years. I recently heard a well known property investment guru indicate that they had carried out research that pretty conclusively showed that this had been the case since the Domesday Book was finished in 1086.
This is what really makes property so attractive as a long-term investment.
Invest property for the long term
Even given this historically upward trend, there are still peaks and troughs in property values and the last thirty years have shown that some of those troughs can be very deep and quite wide as well. Nevertheless, the property market always comes back into an upward trend. That is why it’s so important to invest in property for the long term. By long term I mean that it is wise to view ten to fifteen years as a sensible investment period for property. That way, any downturns in the market can be ironed out over the period.
Benefits of property investment
There are a number of benefits when you invest in property. There is leveraging of capital through borrowing that provides the ability to purchase multiple properties using little of you own capital. There is the growing equity you have in property when the market is in an upward trend and the capital growth in the property values which enable you to drawdown additional borrowing against increased values. There is the added value of the rental income that can be gained from your property investment and the investment in a stable asset class over the long term.
Other Investment Options
Investment in stocks, shares and bonds are also popular and seasoned investors like Warren Buffet are living proof that share investments can work when you study the market professionally and develop a strategy. Any share investor would be wise to consider following Buffet’s investments closely. Again these will work well in the long term. But many people put their trust in property instead because they can touch it and the property market isn’t generally going to be adversely affected because of a rumour on Wall Street.
Gold is popular again and it comes around at intervals when other investments look to be unsafe at the time. Again, it is an asset you can touch but you wouldn’t want to keep it around the house unless you have Fort Knox type security. Foreign Exchange trading is also growing in popularity and can provide some spectacular results given the right mindset and the experience that comes through continued trading over time. The keyword here is time, the time you need to gain the experience.
To invest property or not
The historical evidence supporting property investment over the long term is compelling and should not be ignored. After all, people always need somewhere to live and most have gone past the cave-dwelling era. With the advent of increasing numbers of people living alone there is a greater need than ever for investment property. And with property values increasing over time it is becoming harder than ever for people to buy property so they turn to renting.
You can see and touch property so it is as popular as ever as an asset class for investment. It has served renowned property investors such as Donald Trump well as his property empire continues to expand, so why shouldn’t it work for you? But if you are going to invest in property consider why you are doing so and consider it as a long term investment before you take the leap of faith.