By Maise Hunns, a British journalist writing on business, property and finance.
Investing in property is always a gamble but there are pros and cons to everything. So if you’re thinking of investing in commercial property in Peterborough or anywhere else in the UK, there are a number of things you need to consider first.
Investing in property is a popular move for many people and it does have a number of attractive qualities and potential benefits. Let’s take a look at the pros in more detail.
One of the main pros of investing in property is that you actually have something physical to show for it. When you compare this to other forms of investment, such as stocks and shares, it can make a big difference. Actually being able to physically touch and see your investment can really make a profound difference.
A regular income
If you’re investing in a property that you intend to rent out then a tenant’s rent payments will provide you with a steady and regular income. With houses and apartments being highly sought after in the UK right now you could make a lot of money through property investment.
Capital growth also means that if your property increases in value over time then you could make a good profit if you decide to sell it as well.
Another big benefit of UK property investment is that many expenses can be cancelled out by your rental income. This provides you with a big boost when it comes to tax. Expenses like loan interest can also be subject to deductions in tax.
You have more control
Another big benefit to investing in property is that it gives you much more control over everything! You can decide when to buy and when to sell, and if your house loses value then you can just wait for it to go up again before selling. When compared to other forms of investment, property gives you much more freedom to do what you want with reduced risks.
OK, it would be unfair to say that property investment in the UK is completely simple but, compared to other forms of investment, it is a lot easier. There’s less technical jargon to worry about and real estate is much easier to understand than you might think.
While there’s plenty of potential pros and benefits to property investment, there’s always some negatives, isn’t there? So let’s take a look at the cons of property investment.
This is going to be the main con for a lot of people; there are a lot of potential expenses you need to think about before investing in property. There is stamp duty, legal fees and the expense of using a real estate agent. So if you do want to invest in property make sure you take these costs into consideration.
Vacancies are part of the property investment experience. No matter how attractive your property is there will be times when it will be vacant. That means they’ll be no rental income for you to rely on and you’ll have to cover expenses like council tax yourself.
While there are safeguards in place to help you with problem tenants, it’s still something every potential property investor should take into consideration. Your tenants could refuse to pay bills, damage your property or worse. Make sure you are prepared to deal with problems like this if they do occur.
Property prices can go up and down dramatically with little warning, this could potentially mean that if you do want to sell your property you could still end up covering some of the cost. This is called negative equity and is something you need to carefully consider before investing in property.