What are the Advantages and Disadvantages of Property Investment?

Investing is one of the most important responsibilities of our lives. If you have made investing a habit, you are definitely on the right track. So what are the advantages and disadvantages of property investment? Let's answer.

For prices, taxes and the whole buying process, see our guide: Overseas Property Investment Guide

Stable Returns

Property investments usually produce a long term return. By earning rental or sale income you can build a steady cash flow. The English property market generally grows steadily, which offers property investors long term earning potential.

Value Increase

The English property market almost always tends to appreciate. Property in the large cities in particular tends to hold and increase its value on the back of rising demand and limited supply. That offers the potential to grow the value of your investment over the long run.

Rental income

By investing in property in England you can earn a steady flow of income through letting. Rental income helps you recoup your investment and cover the running costs of the property.

Tax Advantages

Property investors in England can benefit from certain tax advantages. A given amount of investment income from homes offered to tenants may be exempt from tax, for example. You can also deduct the expenses you incur on your property, and agency costs, from tax.

Like any investment, though, property investment carries some risks. Movements in the property market, difficulty finding a tenant or a period with the property empty all represent potential risks. Property investment is also normally low in liquidity, meaning it can be hard to turn your investment quickly into cash. With our years of experience in property investment advice, however, we bring the less favourable sides of property investment down to a minimum. When your home is let, Yatırım UK runs a detailed financial history check on the applicants and sees even a single missed electricity bill. From tenants who might carry risk, rent covering the whole of the tenancy term is obtained before the keys are handed over. Should the tenant unexpectedly want to leave, they either give at least two months notice or two months rent is collected from them. Because the rental market in England is one of the fastest and most active in the world, most homes receive their first offer within 6 to 24 hours. Although a home standing empty is close to impossible, finding the right applicants is very important and removes the great majority of the risk in property investment. 

It is important to conduct careful research, understand local market conditions and seek professional advice before making property investment decisions.

Sincerely,
YATIRIM UK

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Answers to the most common questions on this topic: Which UK Cities Have the Highest Rental Yields?