Property As An Investment

by

Paul Howe

Investing in property in the right way can be a good money earner, but property investment does not necessarily guarantee a brilliant income if the market is not in your favour. So how can I invest in property? There are a few options.

Firstly, you could buy a property directly. This does mean that you will have to have a large lump sum available as your deposit or the funds to buy the property mortgage free. You can then either –

a) Let it out: this will give you income from the rent your tenants pay, and if you do have a mortgage on the property this rent could be used for mortgage repayments.

However, if you are thinking of relying solely on the property\’s rent to cover these repayments remember that if for any reason you have trouble with a tenant paying their rent on time and fall behind on your own mortgage repayments because of this you could have problems. Also if you do not have a tenant in the property at any point in time you will still need to be able to cover the mortgage payments. Finally, if your mortgage repayments rise you need to have a contingency fund available to deal with this.

The bonus of buying to let is that in the current market it gives you the time to wait for house prices to rise before reselling the property – leaving you with a steady income in the meantime. Also when you sell the property on you may be able to make a profit.

b) Redevelop and sell on: buying a run-down property and redeveloping it can add thousands to its market value. The aim of the game is to put less into redeveloping the property than you make on the re-sale, leaving you with a nice profit. So making sure a strict schedule and budget is followed is vital to ensure the profits you hope for.

The other option is to invest in property indirectly via a property fund: this will provide you with an income made from rent and dividends and when you sell up you could make a profit. The bonus of investing in property indirectly is that you do not have to take a hands on approach with your investment. Interactions with tenants, letting agents and so on are taken care of by someone else leaving you to relax and not have to worry about patching up a roof, or fix a leaky pipe.

If you are thinking of buying property, contact a specialist residential conveyancing solicitor today.

Wherever you are in Kent, these

Orpington Solicitors

can help you Ducat Law specialise in

property law

in Kent.

Article Source:

ArticleRich.com