Property investment is something that many want to do but are not able to do it just yet. Alternatively, there are those who do have the means to invest but don’t do so for several reasons. This may be down to fear, lack of education or just a general unwillingness to do anything about it. In this article, I will make the case for property investment and why you shouldn’t delay if you have the means to do it.
BTL and residential search the same thing? Definitely not!
Many first-time investors will be looking to treat a property as a place for themselves to live as well as an investment. This is the wrong approach to take- a residential home carries completely different objectives to those of a property investment, and because of this, many first-time buyers look exclusively within their local area. This limits the buyer to properties in one location as opposed to many across the country, and with a slew of managing companies providing a completely hands-off investment approach, this enables investors to look anywhere with no limitations.
Expensive and ever-rising rents are straining young people’s potential for saving. In addition to consistently low wages and very little chance of a raise, young professionals are struggling to live within their salaries.
As well as this, having a relatively low salary, with little opportunity for promotion, is restricting the chance of getting a mortgage from a lender. The only viable route to home ownership for many people in the younger generations is borrowing from family or parents.
The top three suggestions for the best way to get on the property ladder revolved around relying on ‘the bank of mum and dad’ or other family members to help.
Investing as an alternative
Property investment could be the key to young people getting themselves into property ownership. Traditionally, the UK has been focused on owning and living in a property but opening the idea of buying a property to rent out could help first-time buyers on their way.
Investing money into property that can then be used to provide an income is a viable option for young people to consider. Once the mindset has shifted, they will find that it’s no longer a pipe dream, and they could potentially invest without relying on family help.
Securing a mortgage for a Buy-to-Let property isn’t necessarily impossible for people aged 18 to 25, although some lenders won’t allow it. There are group investment schemes open to young investors, and with some research and sensible decision making, owning a home could be safely within their reach.
Change in millennials approach
It’s becoming harder and harder for the younger generation to own their own property which is down to wages not increasing in accordance with rising property prices. Not only is there a financial side to this, but also a change in attitude. Many young people accept they won’t own the property they live in and welcome the flexibility that renting brings. Buying a property to rent out as opposed to live is therefore becoming more and more popular amongst young people
While the older generation is stepping up to help their children reach their goals of owning a home, it could be that there is another way. Home ownership need not be beyond the reach of younger people, but they may need to change their mindset and accept that they won’t be living in the property they buy.
Around 12% of respondents said that buying a property with a partner or friend was the best way for young people. Around a tenth thought that a Shared Ownership scheme is the way to go. The least popular responses included marrying a rich person at 5% and buying an overseas property at just 1%.
Pitiful pension schemes and interest rates
Between the state pension and low interest rates, there is a big chance many will retire with a small pension fund and their money having accumulated little in the bank. An extensive BTL property portfolio allows you to self-fund your pension and live a life of luxury in retirement.
The rental income you attain will be enough to live the life you’ve become accustomed to, or you could sell large chunks of your portfolio for a huge profit. Either way, you are not reliant on any bank or pension fund to secure your future.
For more information on our latest investment opportunities, click on the Investments tab on our homepage. Alternatively, give us a call on 0208 445 6542 or email us at email@example.com for more details.