Safe as houses, that’s what they say, well is it true where your money is concerned? Investment in property has been around forever and can be a really safe method of investment. But there are different ways of making property investments so what are they and what are the details of each of these. Let’s look at a few of the most common property investments.
Accumulating Equity In Your Own Home
This one seems so obvious that maybe it doesn’t even warrant mention but it would seem incomplete to not at least mention it briefly. You may not consider your own home an investment, but it undoubtedly is. Especially if you have a family home, this way once your family is gone and grown up then you will be able to downsize if you wish and realise some of the equity built up in your property to enjoy in retirement.
Property Crowdfunding Platforms
This is a relatively new phenomenon where investors can make property investments in part alongside large numbers of other investors. The crowdfunding platform takes these investments and buys property on behalf of those investors and takes a cut itself. It’s becoming a more and more popular idea, but being still relatively young industry it’s difficult to tell how it will develop over time.
Buy To Let Residential Properties
Another common investment is to secure a buy to let mortgage and rent out the property to private tenants. This is a good method of investing as you can make money in two ways, firstly you are accumulating equity as the mortgage is paid off and also if you can get a rent value above the mortgage repayments it’s possible to make a small profit on this. There are risks as well to this, firstly there is a level of work involved in being a landlord, you may struggle if the property is left empty for a period of time, or if tenants damage the property or fall behind with the rent you still need to make the mortgage payments not to mention the upkeep and maintenance costs.
Purchase Plots Of Land Speculatively
You can buy empty plots of land as an investment without actually building property on them. The idea is that you buy a plot in an up and coming area and hope that the land becomes more valuable as the area is developed upon. This can be an investment that in good cases gives a large return on the initial investment but it is also one which carries a fair risk as if the area does not end up being developed in the way that you predict. This type of investment requires a thorough amount of research and experience, it can take a few failures as well as successes to become an expert at this type of investing so be careful if it’s something you are inexperienced in.
Commercial Property Investment
Commercial property is another area of potential investment. It’s similar to buy to lease but the properties are likely to offer a better % return on your money. The big potential downside though is that the risk is greater as it is more likely that commercial property can sit empty in the event of an economic downturn or change in business trends.
