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Why does it make sense to invest in real estate?

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Andy

Why does it make sense to invest in real estate?

with

Andy

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The property market in the UK is in rude health at the moment. Recent figures from the first quarter of 2018 showed an 8% rise in property exchanges compared to this time last year. This clearly shows that confidence amongst buyers is rising and bringing much-needed momentum to the UK property market.

What does this mean for you if you have some money to invest? In simple terms, it means that the current climate makes investing in real estate a real option. Bricks and mortar has long been seen as one of the most stable investments to make, and the current buoyancy in the market certainly bears that out.

Furthermore, it is also no secret that the real estate industry has undergone some major developments over the past few years. For example, real estate businesses can now make use of real estate back office software and other tools to maximize productivity in the workplace.

Technological developments in the real estate sector have made the administrative side of the business much more streamlined and these benefits are then passed on to real estate investors who are provided with a better quality level of service. It will therefore be interesting to see what else the future holds for real estate industry software, as things do seem to be going from strength to strength and this makes real estate an eternally promising investment opportunity.

Why invest money at all?

Of course, you may wonder why investing any of your savings or capital in anything at all is wise. Investment has long been used as a tool to help make your money work for you and bring in a steady income on an annual basis during your lifetime. The right investment can bring handsome returns and certainly much better rates than putting it in your bank savings account. Instead of your money just sitting there, you could actually use it to make more.

With the UK property market taking off in 2018, it could be the ideal time to get involved.

Real estate investment is a wise move

There are lots of things that you could invest your money in, from fine wine to stocks or fine art. If you want a sector that brings stable returns and is accessible to all, however, then real estate investment is a wise choice.

Here are some superb reasons to take the plunge and invest in this sector:

  • Stability when you are investing your money, the prime concern is that you are investing in a stable and secure market that will see you get it back and make more. The real estate market is one of the best for this. Everyone needs somewhere to live, and all businesses need somewhere from which to operate. This constant need in the UK means that property will always represent a sought-after and reliable investment. While the property market can fluctuate at times, it is generally stable and a sound investment from which to get a return.
  • Easy to get into another great reason to invest in real estate is that it is easy to get into. No special qualifications are needed, and you do not need any expert knowledge that takes years to build up, as in other investment classes. It is as simple as finding a property that you can afford and that you think will make you money when you sell on or rent out.
  • Finance is relatively easy when it comes time to invest your money into real estate, you may find that you need financial help to get the full amount. Luckily, banks love lending against property and will generally make it quite simple for you to access funds as long as you meet the basic criteria of the loan. This is not as true for other asset classes, where they might be less keen to lend any money to you.
  • Great investment for the future you may, like most people, be thinking of making an investment with one eye on your future. Many people will invest money now with the aim of seeing it provide a comfortable existence for them in their retirement. Real estate investment is a superb way of doing this, as in the long term, the value will only rise, even if you do see a short downturn in the markets along the way. Before deciding on which real estate investment to go for, you may want to look into a 1031 tax deferred exchange to see how this can affect your taxes in this area.

How to get started in real estate investment

If you like the sound of investing in a piece of real estate to rent or sell, then you may wonder what the best way to get started is. The first step is to thoroughly research the location that you are thinking of investing in to get to know the market in that specific area of a town or city. Once you have done that, draw up a solid business plan to outline your overall goals – this should take in whether you will rent or sell the real estate you invest in, if you will do any redevelopment work, your desired ROI, and all the costs that you may have to cover.

Many people will take expert advice also, especially if they are new to investing in real estate. This will help you make the correct decisions along the way, as experienced property developer Ali Seytanpir notes.

Investing in real estate makes sense

For most people, the perfect investment is one that offers low-risk, great returns and is easy to manage. Real estate investment hits all these marks and as such is certainly worth considering when looking at where to place your money.

Andy McGowan
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