investing in property

Second Homes: Why Everyone Should Invest In Property

Most people have a home and a mortgage already. However, it’s often wise to purchase a second property if the individual has the capital in their accounts. Lots of folks choose to walk that path, and they tend to experience many benefits. With that in mind, the information on this page should help to explain the situation. Those who read to the end of this article should have a better understanding of the reasons behind those second home purchases. It’s usually best to buy during the winter months because fewer individuals are looking to invest. So, now is the perfect time to take a leap of faith.

Investment in property

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Property investments are lucrative

There is no getting away from the fact that people tend to make a lot of money out of property investments. The markets are reasonably stable, and that means anyone who makes a purchase will earn a profit at some point. In some instances, that just means buying the house and holding onto it for a few years before selling. However, average prices in some areas have begun to skyrocket recently. For that reason, it makes sense to perform a lot of research into the best locations before signing any contracts.

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Anyone can become a landlord

Buying a second home doesn’t’ mean the individual has to spend any time inside the property. While some folks like to use their purchase as a vacation house or something similar, others choose to become a landlord. That is an excellent move for a couple of reasons. Firstly, the property continues to increase in value until the owner decides to sell. However, the individual will also make a profit during that period by charging more than the monthly mortgage costs in rent. Just bear in mind that landlords have to:

  • Maintain the property to suitable standards
  • Manage any improvements or repairs
  • Keep any promises made in the rental contracts

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It’s possible to buy a second home anywhere in the world

There are no limits when it comes to the purchase of a second home in an idyllic location. Indeed, many people end up investing in homes overseas because they’re often cheaper than those available in the US. So, whether the individual wants an apartment near the Mexican border or a mansion over the divide, they shouldn’t hold back on their ambitions. Property prices in central Europe are probably the best in the world at the moment. Indeed, it’s possible to purchase a four-bedroom home in Romania for less than $50,000. So, be sure to perform a lot of research and assess different markets before making the final decisions.

The information from this post should have helped to highlight the benefits of buying a second home. So, now is the best time of the year to put the wheels in motion. People who focus on that task today could end up with the perfect property long before Christmas. Investing in a second house if much better than leaving the money in a bank account. The property could double in value over a period of around ten years, and that means the owner would make a fortune! Good luck!


Is investing in property a good idea in the current climate?

Is investing in property a good idea in the current climate?

In a climate of volatile stock markets and low rates of return offered on many savings and investment options, investing in property through a buy-to-let mortgage arrangement may look like an enticing prospect to the investor.

Investing in propertyFor those able to raise a large enough deposit, a buy-to-let property can have the potential to generate a good rate of return, especially while mortgage interest rates remain relatively low. Nevertheless, there may be significant risks involved in property investment and there are a number of things that you should consider before you leap in head first.

Many lenders now require a minimum of 25% as a deposit before you will be considered for a buy-to-let mortgage, and rates will often be above those offered on conventional domestic mortgage arrangements. While this can make it seem a relatively expensive investment opportunity from the outset, it’s important to remember that the higher the deposit you are able to pay, the less interest you will pay, so raising that extra bit of capital may prove cost-effective in the long run.

Number-crunching is vitally important if you are considering investing in a buy-to-let property, particularly in today’s market where ready cash is not often in easy supply. It’s a good idea to start by developing a careful financial strategy and asking yourself questions such as:

  • Will the rent you are likely to receive cover the mortgage repayments?
  • How would you manage financially if the property stood empty for a month or more?
  • Though mortgage interest rates are currently at a relatively low level, would you be able to cope if they were to rise?
  • Have you taken into consideration all the costs involved in acquiring and owning a buy-to-let property, including taxes, lenders fees, and other costs associated with being a landlord such as property maintenance and insurance?
  • Will you engage an agency to deal with the practicalities of letting your property, or will you be able to invest the time and energy required to take on responsibilities such as viewings?
  • Is your chosen property in a desirable location? Choosing a location where people would be likely to want to live does not necessarily mean looking for the cheapest or most expensive possible area, but it is worth thinking about the quality of local transport links, and schools in the area.

You may want to speak to an impartial mortgage advisor who can help guide you through your options when it comes to obtaining a suitable mortgage.

Property prices can drop, and you may not get back everything that you put in so you should consider all of your options carefully and compare the risks and benefits with those associated with other types of investment. A detailed financial plan can help you decide whether investing in property is the right choice for you according to your individual circumstances.

Investing in property can be both exciting and challenging; by doing the groundwork early on you can improve your chances of building a successful investment even in today’s uncertain climate.

This post was written by John Hughes who is the resident blogger at www.bestbonds.co.uk , a UK based site that provides access to market leading investment and savings bonds.

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