Why invest in property?
According to the times rich list, 40% created their wealth through property.
The other 60% invested in property as a means of growing and protecting the wealth that they created in other industries. In fact, more millionaires attain their wealth through property than any other type of investment.
Why invest in property?
Unfortunately most of the population will die poor. Not only are we living longer lives, but the Government is struggling to support us into our retirement. In addition, pension schemes are no longer sufficient. Unless we do something now to look after ourselves in the future, then we will probably work past the normal retmirement age and suffer from a poorer standard of living.
There are basically three things we can do about this
- Start a new business
- Invest into the stock market
- Invest in property
From our experience, we have found that investing in property is by far the most risk-averse, hands off and financially rewarding option. One of the main reasons is that the UK has always been (and will always be) a hugely popular place to live. It is just and island with a very stable population. Therefore prices will continue to grow, even though we currently find ourselves in a deflated market (which is actually great for investors).
However, the main reason that investing in property performs so well is because we can invest using other people's money, typically in the form of a mortgage or other lending facility. For exmample, if we had a sum of £50,000 to invest, then we could buy £50,000 worth of shares. If they performed well and achieved a growth rate, say 7% per annum, then after 10 years the value would be £98,358 (say £100,000). This is a 100% return on our investment!