• Pros
Investment property is generally considered to be a safe direction for long-term results. From an initial outlay, it can be possible to realise a good return with little risk.
While it is possible that house prices will fall, it is still likely that rental income will outperform mortgage costs, keeping the overall investment in the black.
• Cons of buy-to-let
Buy-to-let mortgages are taken out on a property which you do not live in, but have bought purely to rent out. There is a perceived risk that the house may stand empty, so most lenders will charge extra on a buy-to-let mortgage or ask for a higher initial deposit.
If you own your own home outright, it may be possible to remortgage in order to raise the funds for property investment without incurring the higher cost of buy-to-let.
• Factors that influence house prices
House prices are affected both on a national and a regional scale. The quality of the area in which the property is situated may have an impact on its saleability and desirability.
However, as rent is likely to be in proportion to the value of the house, the overall return on investment may be the same. Interest rates will affect prices nationally, so it may be worth checking the state of the economy before buying a house.
• Commercial property
Investment in commercial property may be more secure than residential letting, for a number of reasons.
First, it is possible that commercial tenants will sign long-term contracts over a number of years, rather than the one-year contracts usually signed by residential tenants.
Second, commercial tenants may be held responsible for repairs, whereas the landlord will generally repair residential properties.
Third, income from commercial property is typically based on rent, whereas a proportion of return from residential is based on capital gains from increased house prices.
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www.TheMoveChannel.comBab Al Badr - Al Marjan Island, 100% Freehold, Tax Free, High ROI.
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www.TheMoveChannel.comBab Al Badr - Al Marjan Island, 100% Freehold, Tax Free, High ROI.
Bab Al Badr - Al Marjan Island, 100% Freehold, Tax Free, High ROI.
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