Investing in Property: Why is Now the Best Time?
We get asked this question often. Why do we still invest in property? Why should we invest in property?
We always answer these questions with the same answer. Look at some of the richest individuals in the world, and they’ll have made their money through property or invested in property as their investment vehicle of choice. And it’s the same reason we invest in property personally. We see property as a safe place to invest our wealth long term in comparison to other investment methods.
Many individuals ask why now? Why is now a good time to invest in property? We are going to summarise why we think now is an excellent time to get into property.
The population is growing. More people means more homes are required. Demand for property has never been higher.
We have seen a shift to renting long term. The younger generation favours renting; whether that’s to allow them the freedom to follow their career or to go travelling. Many young professionals cannot afford to buy a property.
Leverage. When you buy a property, you only need to put down a deposit; therefore for every £1 you put in, you can borrow 3 times this from the bank. This is important when we look at capital growth over time, as you benefit capital growth on the total property price rather than just growth of the equity you hold in the property.
Make money when you buy. If you can secure a property below market value, you are technically making money when you buy the property.
Timing: no matter what the market is doing, so long as you buy smart, you should get into property now. There will always be political issues, crashes in the market etc. So long as you are prepared to hold property long term, you will grow your wealth regardless of when you get into the market.
Tax changes (Section 24). The Government brought in a new law last year, that meant that anyone with rental properties would no longer be able to claim their mortgage payments as a tax-deductible expense. Many landlords are realising their rental properties are costing them money, and are keen to sell them quickly and for a low price.
Pensions. Many people are starting to realise their pensions are not going to allow them to live the life they’ve dreamed of, let alone cover their current costs of living. Property can be used to create passive income for retirement, and many of our clients are in property specifically for retirement income. If you are self-employed or have a limited company, you could use your pension fund (via a SSAS pension type) to build your property portfolio. We have a video on our youtube channel explaining the benefits of SSAS pensions in property and I’ll link to it at the end of this video.
Finally, savings accounts. We’ve had so many clients reaching out to us to start their property journey with £50K+ in their savings accounts. These savings accounts might make them 2% annually. Imagine if you could get a 4% net yield year on year, not to mention capital growth over time. It’s really a no-brainer – get your money to work harder for you!
We hope this article has been useful in highlighting why now is the best time to invest in property. The benefits are life-changing.
Click the link below to book a call and find out how we can help you on your property journey.
