What are the Pros and Cons of Real Estate Investing?

If you’re considering becoming a landlord you should be aware that new legislation means you need to do your research before you go ahead and sign on the dotted line.

The legislation means you’ll have plenty to think about before you part with your hard earned cash. However, to make things somewhat easier for you below you will find the pros and cons of real estate investing:

Pros

– Plenty of Options

You no longer need to have a lot of cash to spare if you want to make an investment. From as little as £100 you can eventually own and manage a property. There are a number of property investment accounts that offer you the chance to invest through your pension, or even through a standard account using a property ISA.  Your investment could be boosted by rental returns which means if the cost of the rental property rises so do all of your returns.

– Long-Term Returns

We all know that the cost of almost everything tends to fluctuate including property prices. However, if you’re looking for long-term returns you’ll be pleased to know that prices are likely to rise in the near future. With property values up approximately 20% over the last decade there is still room for more improvement.

Cons

– Stamp Duty

In recent months, buy-to-let landlords have been hit by tax changes. This means you’ll have to pay an extra three percent stamp duty on a new property if you already own another property elsewhere.

– It’s Harder to Borrow

With the Bank of England’s base rate at 0.5% at the time of writing, borrowing costs can be cheap for a buy-to-let investor. However, mortgage lenders often insist that your rental income needs to be around 125 percent of your mortgage’s interest payments. Lenders are also beginning to check your property portfolio when they’re making a mortgage decision. This potentially means that if a few of your properties do not generate enough cash to cover those repayments you may not be able to get a new mortgage.

As you can see, there are a few good reasons to invest in real estate and a few not-so-good. The trick here is to determine whether the pros outweigh the cons and whether you’re prepared to take a chance and boost the size of your real estate empire.

About Us

Slater Forbes are one of the leading property investment companies specialising in off-plan property

20 Years Experience

Please note that Slater Forbes Investments is not authorised or regulated by the Financial Conduct Authority and is not permitted to offer financial or investment advice to UK resident investors, whether or not the intended investments are regulated or unregulated. We strongly encourage all prospective purchasers to consult an FCA-authorised Independent Financial Adviser before committing to any form of investment. This is not an offer to participate in a collective investment scheme as defined in section 235 of the Financial Services and Markets Act (2000) and Investors will not have access to the Financial Services Compensation Scheme or the Financial Ombudsman Service. This website, videos and documents referred are intended to provide general information concerning the proposed development, construction and the management of ”The Development’. The information provided has been prepared in good faith and to give a fair overall view of the Development. Photographs and electronically generated images, furnishings and accessories featured are for illustrative purposes only. All information provided by us at our web site or otherwise is provided on an illustrative basis. This email is for the sole use of potential business partners and/or prospective purchasers. We recommend that all appropriate commercial, tax and legal enquiries and advice is taken before entering into a legally binding contract to purchase a property forming a part of the development. All investments attract a degree of risk and Slater Forbes encourage all clients to undertake their own due diligence. Property prices can fluctuate and the value of your investment may go down as well as up. Prices and financial illustrations are provided as guidance and are examples of the possible discounts, yields and returns that investors could achieve. Copyright in and to this website and documents and videos referred belong to Slater Forbes, which is a trading name of Green Key Sales and Lettings Ltd, which is a UK registered company no 10037602.