Why Invest in Property?

by : Lester Emanuel


Interest rates for savers generally follow inflation trends and statistics show that these gains are always positive unless you are very unlucky. The reason why so many people invest in Banks is because they are usually a safe bet. Indeed, often your savings will be guaranteed.

Money in a savings account is usually a safe investment but the return can sometimes be limited for the investor when compared to other options.

There are many opportunities for investment depending on the level of risk an individual is prepared to take. These forms of investment might include stocks and shares, endowment insurance policies, pensions etc. We are focusing our attention on the property market where our expertise is.

Stability of Property Values

In real terms although property markets do suffer from peaks and troughs, property does increase in value in the long term. Recently in some areas, property prices have actually gone down, this is due to the economy which has an effect on supply and demand. An over supply of property can easily reduce property prices when the property market is struggling.

Property prices do go down but history has shown that they always recover and they are stable in the long term. Steady or significant increases in property prices are usually the norm.

Whilst there can be no guarantee that property prices will increase over say, a one year period it is generally accepted that a well maintained property in a reasonable area will appreciate in value.

Interesting Statistics

The following statistics make interesting reading:

    50% of individuals mentioned in The Sunday Times Rich List made their money through investing in property.

    A property worth just €10,000 some 30 years ago would be worth around half a million Euros at todays prices.

    Between 5th October and 6th November 1987 the FTSE share index fell by a massive 32.1%. (Published Bank of England Statistics)

It would not be fair to say that money cannot be made on the Stock Exchange and no one could dispute that. Most people take professional advice before investing in the stock market which is advisable.

Property Investment

The most successful property investors usually research the market and build up a considerable knowledge before they invest. Speculators often make huge profits by predicting changes in the property market and investing for gain, often just at the right time.

Most individuals who invest in property do so based on their own research and experience. The success rate for property investments is usually quite high which is why it is such a popular and sometimes enjoyable choice.

Building up a Portfolio

When a property which has increased in value, or if the loan has diminished, equity can be released from that property. Many buy to let investors have successfully used their borrowing ability to build a property portfolio and many have generated substantial wealth for themselves.

Buying property enables the investor to secure borrowing which can then be used to make further investments in property; this cannot be said of most conventional types of investment.

Rental Income from a property can then be used repay the loan which in time also increases the value of the investment. As property prices increase, so to does the investment and the increased equity can therefore be used to secure more funds and increase investments in property.

Many individuals have also increased their gains by investing in property located in up and coming areas or by making improvements to properties. Property improvement will always enhance property value.

Short or Long Term Property Investment

Whatever type of investor you are, property should always be a good long term investment.

If you are purchasing that place in the sun you can still benefit from the same investment opportunities but perhaps also with the advantage of an increased income from holiday letting.

Buying an off plan property can be a lucrative short term investment because Developers usually sell the opportunities at less than the market value in order to attract investors. The reason for this is that the Developer will benefit commercially by the the Investor funding the development cost.

It is not unusual for Investors to make 20 per cent profit by the time they get the keys. The Investor benefits from the enhanced inflationary value of the property during the construction period because the price is fixed before construction. Some Investors are able to sell the property on before it is even finished.

Opportunities for Investment in the Property market

Prices are probably lower now than they have been in real terms for a couple of years so now is a good time to invest.

We have many bargain properties and off plan property investments on our website, if you need any help deciding on the best opportunities why not contact us for advice.

Whether you are buying a home, buying to let, buying for investment or buying a business, we welcome you to view our selection of properties on our website in the following countries:

Spain, The Canary Islands, - Tenerife, Portugal, The Cape verde Islands, the Caribbean Islands, Brazil, Morocco, Hungary, Poland and Romania.

Click here to visit the Expedia Property Website