By Gregor Cope
So, you’re thinking about investing in property? Even in a market that’s not firing on all cylinders, and following a recent series of government measures all aimed at putting you off, investing in a buy-to-let property could still provide a decent return.
Leaving money in the bank is not an option if you’re determined to make your savings work for you, given current historically low interest rates, and the kind of investments you’d need to consider to achieve anything like the returns you might get from property are always going to be a higher risk than perhaps you’re willing to take.
That’s not to say investing in property carries no risk, or even a low risk. Old assumptions about the movement of ‘the property market’ are outdated.
We now live in an age of lots of sub-markets within the same city or town, often within a few streets of one another, all with their own dynamic and influencing factors. You can have a buoyant market in one area and just a couple of miles away it’s sluggish or flat as a pancake.
People ask me if the property market is affected by Brexit, or a slow economy or a weak pound. The truth is that it may well be in some areas while others are unaffected. It all depends on what’s for sale and who’s interested in buying.
House prices may not be rising in value with every passing week, the way they did a generation ago, but that doesn’t mean property can’t provide a profit.
Doing your homework and getting good advice has never been more important and there are different rules and pitfalls to consider depending what age you are.
First time buyers are no longer youngsters straight out of school or university. Most will have to save for a deposit, often over many years, and so if you’re taking your first step on the property ladder, chances are you’ll be in your early or even your mid-thirties.
Middle aged people who have invested in property as a nest egg to ensure a comfortable retirement have had to plan carefully.
There are more opportunities – and greater temptation – than ever before to liquidate your portfolios and many people leave it too late to benefit from tax mitigation, such as various allowances.
But at the same time there’s never been a better time, for those who can afford it, to land a great value, buy-to-let mortgage.
It’s always advisable to spread your assets and to have equities and bonds as well as property to avoid the ‘eggs in one basket’ dangers.
Most people’s main investment is their home so, if you’re buying additional properties, you will have more exposure to a single class of asset.
If you’re involved at the right time, your property can gain in value and it has the potential to make money for you. The longer you leave it, the less you will benefit. For example, if you are buying your first property in your thirties, you’ve already lost several years in which you could have benefitted from compound interest.
For more information about investing in property call your local Scottish Property Centre branch or visit www.scottishpropertycentre.net
Gregor Cope is a Director of Scottish Property Centre Shawlands