Is Property Investment the right decision for you?

Is Property Investment the right decision for you?

Having property assets, either as an investment vehicle or simply as a place to call home can be highly complicated. For most, it will be the most expensive purchase of their lives, and that's a big decision to make. It's a commitment that can be daunting, if not outright scary, for many, and it's always good to know exactly how it works before venturing in.

Property is best for a long term investment

Regardless of the purpose, as an asset class, property has one of the longest investment horizons. You will go through many economic ups and downs, be affected by changes in interest rates and see your property value fluctuate.

However, it will tend to increase over the long term and historically is a safe and sound investment. Always bear in mind that historically this has not always been the case, but generally, owning property can be a great asset.

Another great part about home-ownership, or owning property, besides not having to spend money on renting property to live in, is that it can be used to raise finance. By using property as collateral for mortgage purposes you can take advantage of interest rates when they are low. It can be used as a source of income if you ever decide to partially or fully rent out your property.

There are a lot of costs to be aware of

Yet it’s not just smooth sailing and although your investment should appreciate over the long term and you can collect income there is also  the need to pay bills. There are ancillary costs that come with owning Property; from the onset, there are the fees paid out to purchase the property, which are upfront and one time.

Then, if you are financing there will also be the ongoing monthly mortgage payment which, is a reinvestment into your home as you begin to pay off capital. This can be offset by rental income if that is the reason for your purchase

You will need to consider property taxes (which can vary based on your region) plus you will need to pay for insurance to protect the property, and all utilities will need to be paid out from your pocket (unless you are renting out in which case your tenants will pay these).

Another cost that is often forgotten is repairs and maintenance. From a minor fix to a complete remodel, you're fully responsible for this regardless of whether the property is your main residential home or a buy to let.

Property Ownership can build generational wealth

When done correctly, owning property develops something known as generational wealth that helps families grow wealth down the line. It always begins with one property and can grow to many, building out a mix of personal and business use properties to generate income and wealth.

If handled the right way early on, or if you already own property, it can be one of the best options for long-term growth and wealth.

Working with the right people

One thing that can get really complicated when it comes to buying and keeping property is all the paperwork, and there's a lot of it. For example, a mortgage itself can be dozens of pages filled with legal wording, terms and conditions, not just the amount of the mortgage and the subsequent monthly instalments

Then there's the contract for sale, which is another component filled with excessive yet necessary information. But, it doesn't stop there, as there'll also be a check on the title deeds held with Land Registry and the historical information that needs to be carefully checked, plus the searches which are carried out with the local authority the water company and environment agency.  You will need to consider whether the property is in a mining area too, for instance.

All of this is done so that when you push the button to purchase the home, your name will be on all the correct legal paperwork to prove your ownership. It is a very complicated process for anyone who hasn't done this before, and it's always recommended to work with a conveyancing company that will handle all of this for you.

There are ways this transfer of assets could go wrong, or the wrong document is filed. When you work with a conveyancing team, you'll know all this paperwork will be done correctly the first time.

Put yourself in safe hands with Arrow Conveyancing. We’re friendly, reliable and very experienced. Call us to discuss your purchase or sale.

Contact the experts, Arrow Conveyancing Ltd, for more information about conveyancing and buying and selling your property.

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Arrow Conveyancing Ltd.

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The materials on this website do not constitute legal advice and are provided for general information only. Whether express or implied, no warranty is given concerning such materials. We shall not be liable for any technical, editorial, typographical, or other errors or omissions within the information provided on this website, nor shall we be responsible for the content of any web images or information linked to this website.

The information contained in this article does not constitute financial advice or recommendation and should not be considered as such. Arrow conveyancing does not offer financial advice and is not regulated by the Financial Conduct Authority (FCA), the authors of this article are not financial advisors and are therefore not authorised to offer financial advice.

Published on :  

December 13, 2022

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