Creating wealth through property investment

Creating wealth through property investment

Money is an important component of living a satisfied life because it is the major medium of exchange and with it in abundance, you can afford your other pressing needs.

But despite it’s crucial role in human life, managing wealth is something many people – even the affluent individuals – struggle to achieve.

With diverse opportunities surrounding us, there is no limit to the number of ventures and businesses in which you can invest your money. However, the challenge comes from the risks involved in various investment portfolios.

Unlike many other investment vehicles, property is one of the best ways to invest your money. Apart from traditionally having the ability to preserve wealth over a long period of time, it is also a lucrative wealth creation vehicle.

While it has its own ills, property generally appreciates over time. This means that you can multiply your investment capital as the years go by. This is even more practicable in the UK due to the acute need for property.

Image illustrating property and money growth

Although the British economy had been struggling for some years now, it further plunged after the outcome of the Brexit referendum which saw the UK citizens vote to leave the EU. With uncertainty hanging over the possible outcome, many rich investors pulled out of the stock market in order to secure their wealth.

Additionally, the sterling has been performing way below optimal and is currently struggling against rival currencies. This has led to an increase in foreign investment as investors from other countries are taking advantage of the slide in pound value to buy up properties in the UK.

Indeed, a report suggested that a high percentage of new property transactions involve foreign investors, with most of them targeting London and other commercial cities.

Investing in residential property is a good way to earn passive income or diversify your income source. The Office for National Statistics’ data showed that the percentage of 25 to 29 year olds owning their own home, decreased from 55% in 1996 to 29% in 2015, while rental prices are steadily on the rise due to the housing crisis currently besetting the UK.

The government recently increased stamp duty as a way of generating more revenue and discouraging the continued rise in house prices, but that has not detracted new investors from buying more properties.

With a large population of people in need of comfortable homes, now is the best time to invest in UK property, especially as rental income continues to rise and attract more investment.

The UK government announced its plan of building 1 million homes by 2020, a step in the right direction to curb the housing menace. However, analysts are of the opinion that this move will be grossly inadequate. Hence, the need for more private investors to key into the deficit.

While residential property offers quick returns, some investors are coming to the realization of the enormous benefits of commercial real estate. A report indicated that many wealthy Britons are gradually shifting their focus to commercial property, and it is easy to see why.

Commercial property, although being less liquid, represent a much more solid investment vehicle. Unlike residential real estate, it is not subject to frequent fluctuation in prices and value.

As it is a form of long-term investment, you can easily tie down your property for a long time. While the average tenure for residential property is around 10 years, a commercial property can house a tenant who will commit for many decades.

Rental yield as high as 6.2% is possible if investment is done properly. And with many property owners looking to sell their assets, you can even get good bargain for property.

Property investment, unlike other common investment vehicles, is a great way to gather your wealth and secure it for the future.

 

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