property investment asset finance passive income

Things To Consider When Investing In Property

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Investments are a type of asset which are acquired in order to expect a return or benefit in the future. Investing is a popular activity which is being undertaken quite frequently in today’s day and age. There are many assets which an individual can invest in depending on their interests, such as buildings, materials (gold, oil etc), company shares in an established business or, the most recent one, cryptocurrency which has blown up in the media due to the increasing growth in value of the Bitcoin.

I’ve been pondering over investing in property for a couple of months now, and from scouring sites and forums online, it seems many others prefer to invest their capital this way as it is a traditional form of acquiring assets so laws are concrete around this compared to assets such as cryptocurrency. This means that there’s a lower risk of losing out from property investments and it’s much more beneficial in terms of receiving a passive income on a monthly basis through leasing the property.

However, like all things, investing a considerable amount of time and money into property investment needs to be thought through. Landlords have a lot of responsibility in regards to the upkeep of their property, so that it is in satisfactory condition, whether that be for residential or commercial use, to ensure specific requirements are met within the law. Property investment company, RWinvest, talk about the benefits of why residential buy to let is better than commercial when it comes to investing, such as how rental yields and strong capital growth are often more easily achievable with residential properties. Some things to consider when purchasing a property for investment are:

  • Property location and valuation
  • Fees (including solicitor and estate agency costs, land registry/survey fees as well as stamp duty and mortgage costs, if used)
  • Expected cash flow and profit
  • Maintenance costs such as heating, gas and electric
  • Structural inspections to assess property foundations and the building
  • Landlord protection

Safety checks must also be completed and passed through the obtainment of certificates for proof. Most importantly, landlord insurance should be purchased to protect yourself, as the owner of the property, which will be leased out. This protects against issues such as theft, fire or property damage due to natural causes as well as liability protection and can prevent future financial losses as a result of lost rental income. There are a whole host of landlord insurance providers to cover many areas of a property, so it’s worth using a site to compare landlord insurance.

Overall, investing in property is a good opportunity to obtain passive income by leasing it for either residential or commercial use. However, there are also downsides to this investment, just like everything else in life. Personally, I think investing in property is something I will be undertaking in the future, as it’s a less risky option compared to assets such as business stocks and cryptocurrency. Therefore, it really does depend on your personal circumstances and whether you’d prefer a digital or physical investment as well as the associated risks with each option.

Until next time.


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