Becoming involved in the property market is an exciting venture for budding investors, who wish to accommodate their funds into properties that deliver on continual growth, expansion and opportunities for large returns. Hopes of wealth are a common trait among enthusiasts and are often viewed as the safest and most accessible investment among like-minded peers.
Many positives and potential downsides exist in the fluctuating market of real estate, but with educated advice and careful research, investing into the property market holds large rewards for those willing to do the homework first.
Real estate investment, in most cases, guarantees the potential for capital growth in both commercial and housing establishments. The value of a property will inevitably rise over time, regardless of the overall quality of the property itself. Value is rewarded to longevity and regular maintenance on a property, along with the prospect of tenants providing monthly rent into your account. This instant return system allows for investors to steadily gain capital, as long as they upkeep regular maintenance on the given property itself.
The location of the housing market can help investors score a better deal in securing a good property, whether it’s looking at villas for sale in Turkey or housing in the American suburbs, the options are potentially endless.
Investing in real estate is often viewed as a safe business venture. The low risk of entering the market coincides with the natural gain of capital that simply relies on time and the fluctuating market to dictate the value of a property. Even a house in a poor location or condition can benefit from capital gain, which is great news for those weary of taking the risk.
In the event of theft, fire or damage incurred by troublesome tenants, the low risk aspect still applies to the housing market, given that insurance options are available to protect a person’s assets. Broken leases and, particularly, severe property damage can be treated through taking out funds of a tenants bond in order to recuperate the costs to fix it.
Real estate investment enables investors to maintain a significant level of control during the lifetime of the property, with many options available in terms of maintaining the flow of returns and other important decisions that may need to be made.
Tax benefits also exist for investors, particularly properties that may experience negative gearing. Tax departments recognize these aspects and configure returns accordingly based on these scenarios.
Selling one’s property can be a lengthy and demanding task for some investors. If a tenant breaks their lease, has become undesired among the market or the property is no longer considered financially viable (on par with an individual’s needs), then selling can be very time consuming.
If a house or commercial property remains empty during the process of selling, investors are still required to maintain them, without the added benefit of receiving rent from anyone.
Selling may require preparation for an auction, which involves hiring valuators to assess the property and perform any repairs/renovations that may be required.
Ongoing costs are another considerable factor when deciding to invest in property. Initial fees such as stamp duty, legal fees and deposits, can gradually pile up during the investing process. Regular maintenance requirements are also commonplace, with small fixes and repairs regularly occurring during a tenants stay in a property. Other notable factors consist of landlord insurance, building fees, council rates, land tax and water rates, to name a few. In comparison, investments such as shares do not have the same ongoing costs that real estate does.
Tenants that become problematic during their stay may become draining, both emotionally and financially. Disputes such as undesired living conditions or rent increases can produce bad relationships between the investor and occupants. Issues with the inability to pay rent may also arise, which may hinder the financial return on your investment. Such disputes, depending on how serious, may result in legal action and cause serious problems relating to time and money.