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The pros and cons of property investment

  • Published in FAQs

The benefits

  • Property can be less volatile than shares or other investments.

  • You can earn rental income and benefit from capital growth (if your property increases in value over time).

  • If you take out a loan to purchase an investment property, interest on the loan and most property expenses can be offset against rental income for tax purposes.

  • You are investing in something you can see and touch.

 

The pitfalls

  • Rental income may not cover your mortgage payments or other expenses so you may have to use other money to cover these costs.

  • An increase in interest rates will increase your repayments and decrease your disposable income.

  • There may be periods of time where you don't have a tenant and will have to cover all costs yourself.

  • You can't sell off a bedroom if you need to access some cash in a hurry.

  • If property investment is your major investment you may have little or no diversification.

  • If the value of the property goes down you could end up owing more than the property is worth. This is known as negative equity.

  • There are very high entry and exit costs such as stamp duty, legal fees and real estate agent's fees.

How can we help?

Send us your contact details and we will contact you as soon as possible!

 

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