Is buying a house still a good investment?

UK Home Improvement

Is Buying A House Still A Good Investment?

There was a time when property was a solid investment, however, that may no longer be the case. Sure, buying a property to let will create a stream of income. Similarly, purchasing a house and renovating it to sell at a higher price can leave you with more money that when you started. There is no denying that property can be an effective way to make money. 

But before you rush into property investments, it’s crucial to weigh up the pros and cons. It’s also important to consider other investment opportunities, such as stocks and shares.

The Drawbacks To Investing In Property

There are many pros to investing in property; a rental income can be a steady income, property prices often rise so return on your investment is probable, and property is often a key component of an investment portfolio. With that being said, investing in property can have its cons. 

It’s A Long Term Investment

Property investment takes time and once you have invested in a property, it isn’t easy to get your money back in a hurry. If you are considering purchasing a property, you should be willing to wait years for a return on your investment.

There Are Additional Costs

Hidden costs, which are surprisingly high, are often the reason why people regret investing in property. Property taxes, maintenance and house insurance are just a handful of additional expenses. Plus, if you are a landlord and the property you own is empty, you will be expected to pay utility bills and council tax.

The Market Is Unstable

In recent years, there has been a significant rise in property prices following the COVID-19 pandemic. As an existing property owner, this is excellent news. But if you are yet to purchase a property, you may be put off by the unpredictable market, which appears to be continuously rising and falling month on month. 

Renovation Costs Are At An All-Time High

Unless you are planning on purchasing a Buy-To-Let property that is “tenant ready”, there is a high chance that you will need to pay for some renovations or slight changes once you have purchased a property. 

Whether you are buying a property to rent it out, or you are buying a property with the idea of improving it and reselling it, there will be renovation costs involved. 

However, the ongoing cost of living crisis and the significant increase in the price of building materials means that tradesmen across the country have had to hike up their prices. From electricians to decorators, tradespeople have significantly increased their prices to help their businesses stay afloat.

Should I Invest In Property?

Although the property you own may increase in value over time, it is unlikely that the value is enough to offset the additional money, time and effort you have spent investing it in. With that in mind, it is worth considering other investment options. 

From stocks and shares ISAs to Exchange Traded Options, there are several ways in which you can invest your money and make a significant return in the long term.

Before investing money into a property, we recommend speaking to a qualified and experienced wealth manager who will be able to provide invaluable advice and support.


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