Finance

Reasons Why Investing in Property is a Sound Choice

When you talk about investments, a lot of people are likely to tell you to go investment in the property sector. It is, after all, called the highest performing asset class for a reason. If you are trying to find reasons to validate why it is going to make a sound choice for you to create a property portfolio, below are some of them.

Capital growth

A lot of people say that properties double every ten years. While this is not always the case, it is a fact that property has indeed seen a rise in the last ten years. For instance, the prices of properties in Yorkshire have increased by 21% for the last five years. This means that if you are a landlord that owns a property worth £200,000 back in 2012, it would likely be worth around £242,000 now. Considering that you are going to benefit from the income of the monthly rental, then this is certainly a perpetual advantage to the investment.

Leverage

This has something to do with using debt as a way to finance an asset acquisition. In terms of property, this means increasing the return on the invested equity through securing a mortgage. This can’t be done with other asset class investments such as trading shares and stocks or investing funds in a savings account and then just relying on bank interest. Investors, through leverage, can invest less money in while generating a greater ROI or return of investment.

Physical and tangible asset

Other asset classes will not really allow you to touch them physically. This is true for shares and stocks as well as other investment forms. With a property investment, you have an asset that is tangible. To a lot of people, there is always something comforting about the fact that they are investing in something that they can touch and feel compared to just investing in an asset that is electronic. With a property, you know exactly what it looks like, where it is, and that it is not going to go anywhere too.

Chance to add value

There are a lot of opportunities to add value to any existing property. It could be in the form of a refurbishment or through a lease extension. This is not something that you can do with other asset classes. With property, you can always choose to buy one that may require some work, but then after the work is done; you are already able to add to its overall value. With other investments, it is quite hard to buy something at a low price and then resell them at a much higher value after you have made them better.

Investing in property is a sound way of getting a steady additional income on top of what you are already earning now. Learn more about the numerous ways that you can benefit from property investments by reading about Experience Invest reviews online.