This week, Independent Financial Advisor, Darren, looks at how Investment Plans can help property investors get the most out of their investments now and in the future. Ask yourself the question – are you really “investing”, or just crossing your fingers and hoping for the best?
This does not constitute advice and advice should be sought in all instances before acting on it. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
Property is no longer as solid as the bricks it’s made from
Investing in property was for years seen as a solid investment strategy. From the late 1990’s to the early 2000’s, house prices rose at a speedy rate. Then, the bubble literally burst in 2007.
The collapse of the economy saw house prices drop by as much as 17% in some areas.
Since then house prices have been steadily increasing but market experts suggest it is unlikely to ever get back to the level that we saw in the early 2000’s.
If you are thinking of venturing into the realm of property investment, or you are already involved but you are planning to expand your portfolio, it is important that you put together an Investment Plan, first.
Don’t leave your investment to chance: What should a Property Investment Plan include?
Firstly, you need to decide what you want to get from property investment i.e. do you need access to the rental income now or are you holding onto the property to sell in the future when it has (hopefully) increased in value?
Secondly, you need to determine how much capital you can invest in the property and how long it can be tied up for. These factors will govern the type of property you should be investing in.
Finally, you need to decide what level of involvement you will have with the property. You could choose to take full control over the letting. This will require you to become familiar with the 160 laws and hundreds of rules and regulations that cover property rental.
Or, you could choose to pass this responsibility over to a professional letting agent.
Picking a property that is right for you
There is so much to choose from in property – maisonettes, apartments, houses etc. Knowing which one is right for your needs can be a difficult decision. Ultimately it comes to down to your budget.
In London, according to recent figures from Rightmove, the average price for a flat is £518,511. It is no wonder many property investors are priced out of the market.
There are however areas of the country where property prices remain relatively low. For example, in some areas of County Durham, you can buy a house for as little as £14,600.
If you are prepared to look a little further afield you may be able to find a property that will give you a larger return on your investment.
Plan for your exit
As with any investment, it’s important that you have a plan in place for when the time comes to get out.
There are different options with property investment i.e. selling or re-financing. It is imperative that you seek professional advice from a property tax expert.
As your personal circumstances change and the property market shifts it is a good idea to regularly revisit your Property Investment Plan to ensure it matches your current financial situation.
For help with investment planning, speak to Darren
Dental & Medical Financial Services have been helping doctors and dentists with investment planning for over 25 years. Call to discuss your situation with Darren to ensure you will meet your personal financial goals.
Tel: 01403 780 770
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