THE PRO’S AND CON’S OF PROPERTY INVESTMENT
Before you make any investment, there is so much that runs in your mind. You have to make many decisions, and this time around, wise ones. A wrong move could cause huge losses, especially if it is a significant investment.
Every investment type is unique. Therefore, one of the things you should think about critically is the pros and cons of that particular investment. Such factors help you get a picture of whether it is worth it or not.
What are some of the benefits and challenges you should know about property investment?
Let us start with the pros.
Property investment is stable
Ask someone who has experience with other markets like the stock market. One thing that is common to all the investors in that market is the nervousness they undergo because things can be unpredictable. When you invest in property, things are quite different. The market does not fluctuate or become unpredictable in any way. You have control over your asset, since it is tangible, and you get returns monthly or annually. It also gives you the freedom to make choices without being emotional.
Assurance of capital growth
For any investor, there is nothing as frustrating as not getting any returns on your capital. With the property market, you can be sure that your money will multiply over time. This happens because there is a probability that the property will increase in value as long as you have the right management practices.
You can start from anywhere
Because the property market has minimal risks, you do not need a lot of money to start. You can also start with a small apartment, such as a single unit duplex. Regardless of how small it is, it is what you could afford and it does not attract unmanageable expenses. Aside from that, if you do not have enough money, you can take a loan. As long as you can afford the deposit, you could rely on rent from the tenants to help you pay the remaining mortgage balance. Side note: Most investors with huge portfolios started small.
Here is where the rubber meets the road. With all those benefits, expect to encounter some challenges with this investment type. They include:
Your property needs proper management
As you invest, your goal is to see your assets grow in value. You will not be able to achieve this if you do not know how to manage it correctly. Therefore, as the owner, you should be hands-on to repair damages so that the tenants feel comfortable. If you do not have the time to manage the property by yourself, the other option is to look for a property manager. That will incur extra expenses, but they should ensure that everything is running fine on your behalf.
Once you have a reliable budget in place, reaching your goals should be easy. Remember, since investment is risky; ensure that you have a well-written vision so that you have reason to take all risks that come with this investment type.
Finding the right buyer or tenant is time consuming
Even though the value of your home increases with time, looking for the right buyer can be a time-consuming process. Remember, as you flip, your main agenda is to get quick profits so that you can move to another project. That is where finding the right buyer becomes a challenge.
Other than that, if you want to rent the property out, sometimes finding the right tenant can be a problem. Some tenants can be a nuisance, especially if they are not loyal to making timely payments. Meaning, you may have to go for months without getting rental income before finding that good client.
As you put the above benefits and challenges into mind, ensure that you make the right decision before starting any investment project. You can seek counsel from seasoned investors or professionals who are familiar with what you want to do.
Finally, property investment is the best way to build a portfolio. Regardless of the challenges, you can use the income from your assets to achieve both long and short-term goals. You also have the opportunity to start from anywhere.