Is owning property a good financial move?

If you have the money and the means to own and invest in property, it can be a great financial move. For many property owners, owning real estate is their business.

Property, in general, is a hot investment item at the moment.

In fact, property company RWinvest cites the UK property market as one of the most reliable and profitable investment ventures in 2022, owing to consistently high tenant demand and steadily rising house price growth.

However, many people are nervous to step into the world of renting and become a landlord. We’ve listed a few reasons as to why owning and letting property might be for you.

Leverage your investment

Buying and letting properties allows you to invest in assets worth more than you may have had to invest in the first place. With real estate, putting down a deposit means you’re paying for a fraction of the home’s cost whilst investing in the entire asset.

For example, you can invest 10% of the property’s value whilst owning it. Then, as you pay the mortgage down over the years, you’ll hold more of the investment, increasing your rate of return.

Tax benefits

You can take advantage of any tax-related perks that are relevant when letting out a property, as you’ll become a business owner as a landlord. This means you can write off expenses such as any mortgage interest paid on the loan and maintenance expenses.

Ensure to speak with a tax advisor before assuming any expenses can be written off, but this is one of the key benefits as to why investing in real estate is a great financial move.

Regular cash flow

Once you find the right tenants, you can earn a steady monthly income when renting out your property. It can certainly be a daunting prospect at the thought of finding reliable tenants, but letting agents can help take care of everything and remove that element of stress.

There are always risks when it comes to letting out your property to tenants, from causing damage to the house or vacating the property early. However, with any type of investment you make, there’s always going to be risks.

Being a good landlord and acting promptly on any issues your tenants may have will increase the likelihood of them maintaining their reliability, therefore providing you with a regular cash flow.

Renovating

Bringing life to undervalued properties is a great way to make a high return on investment.

Transforming homes by adding a loft conversion, building a modern kitchen or bathroom or fixing damaged roofs can increase the home’s value and therefore, allow you to charge more for rent.

Long-term security

As renting out a property can provide an ongoing income, this can be saved as a pension or for long-term savings goals, providing you with financial security.

Or, if your living situation changes, you’ll always have another property to rely on – if there are no tenants living in it at the time.