Is investing in residential property in the UK really a safe bet? Here are some advantages and things to consider as a first-time investor.
PROs
• You can expect higher yields than commercial property investment.
• Depending on the area, it’s the cheapest time since 2009 to invest in residential property8.
• More people than ever are now renting – a rise that won’t be stopping any time soon.
• Rental income is a steady yield that you can increase over time.
• You can make more money as the property value increases.
• Interest on your borrowing, and other expenses, are tax deductible.
• Getting a mortgage is a good way to enforce a savings programme if you struggle with saving.
CONs
• Interest rates can always rise as well as fall.
• You may struggle to find tenants, although this can be mitigated by researching the area of investment thoroughly.
• You could be unlucky with tenants, but this can offset by using management companies to take care of the nitty gritty.
• It could be time consuming if you take on all landlord duties yourself.
• House prices could fail to rise quickly, or alternatively fall.