Does Property Investment Still Stack Up? | Impression Real Estate
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Does Property Investment Still Stack Up?

Posted by Impression on 26, May 2021

It’s never been easier to invest in the share markets, cryptocurrencies and alternative investments – all you need is an app on your phone and you can instantly trade on global markets at low prices.

With property prices soaring over the past year, and so many regulatory changes discouraging investors, does it still add up as a good investment?

“There are still a lot of reasons to invest in property,” says Michael Cave, Director of Cave Financial. “The first thing to remember is that there are always political changes – so you don’t want to make any decisions based entirely on policies. You need to run the numbers and ask yourself ‘Can I afford this?’ and ‘Will this be an effective way to achieve my financial goals?’ Although the Government is deliberately taking the hype out of the market, do your own homework.”

Although share market investing is passive, profitable and low-cost, property investment still has one major advantage: you can borrow aggressively to buy property in a way that you can’t with other types of investments.

“The leverage story is massive. Even if you conservatively estimate the growth at, say, 3%, the amount you borrow means you make massive growth over 20 years,” says Cave. “When you have a long timeframe, investment property is still a good option to consider as a way to save for retirement. You take a bit of risk and over time you can get the reward – property assets appreciate over time.”

 Finding a cash flow positive property is difficult, but it can be done – apartments are one way to buy a property that pays you to own it. Cashflow negative properties can be a kind of compulsory savings system for high-income earners; they often turn cashflow positive after a few years.

“Get personalised advice, and if property stacks up for you, it could set you up with an asset base that will just keep growing over time.” 

Need more advice? Impression clients have a free one-hour session each year with a financial adviser at Cave Financial. Get in touch with us today to book a time for your financial check-up.

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