Many people consider property as a good investment and while it may not always be the quickest way to see a return on your money, there are many reasons as to why it is a good idea. There are a number of ways that property can bring you a profit and that is on top of the pleasure you will have in living there. It is not without its problems but there is no way that they should be too off putting. Any investment can have an issue. When it comes to real estate, the good news is that the drop that may occur will not be major and more importantly will not be permanent.
If you are not sure if you want to live in an area right away, there is no reason why the house cannot be bought and rented out. The mortgage will have to reflect this but it should not be a problem. You will have to say that this is the intention as the paperwork and funding will have to reflect the end use of the property. Even after the property had been owned for many years there is still the fact that it can be sold that will bring in more money. It will not matter if it was you who lived there or if the house was rented out, as long as it is in a good condition, money can be made on the sale.
There is another way to make money from property but that is not as hands on as owning a house. There are companies who invest in property and there will be the chance to invest with them. This way they will be making the decisions and this way of making money is not for everyone. You don’t have the same level of involvement and most importantly, you do not get to live in the house. It is a way to start off if you don’t want the responsibility from the beginning and really there will rarely be such a thing as a bad way to invest in property.
There are risks when it comes to investing from a distance and this is one of the reasons that people choose to purchase the property and take control of what happens to it. Even here there can be problems but the benefits by far outweigh them and this is why it is becoming a great way to invest. Some are investing for their old age and will rent out the property for good, meaning that there will be rent paid well after the mortgage has been paid off. The other way will be to sell the property upon retirement and this will give a lump sum that can be invested. Finally, some will keep it and either live there for good, or use it as a holiday home and have some great times in the sun.
Although it is a great way to invest it will be best to get the problems out of the way as if things do not go well the first time there can be concerns about future investment. It would be a pity to decide against building up a great property portfolio just because there was an error early on. The main concern is that the money that will be received can go down as well as they can go up. If you are first into an area it may seem that you can ask what you want to rent the house out, but if more and more are built, there will be competition and this means there will have to be a drop in rate in order to be sure that the property is filled. If you are in property investment for the long term, the pendulum will swing back and the prices will rise, but it might mean a few lean years before the good times start again. If too much of your money has been tied up in houses that you are renting out, it might means that you have to cut back elsewhere, so it may be an idea to buy various properties as it is unlikely that all industries will drop at the same time.
An example of this will be if you decide to invest in Cyprus. You could invest in a villa, a restaurant and a small hotel. As one goes through a period of stability, the others could be booming, so one set of properties will cover issues that arise with one.
If you are careful when you start to purchase the properties, there will be less to worry about. There will always be risks when it comes to business but the sensible investor will check things out properly and make sure that any problems they could face will be minimized.
You need to remember that the money you spend could be tied up for years. It is not like stocks and shares where they can be sold quickly if there is the need to raise capital. Even of the house is lived in by you and you are able to move out quickly, there is nothing to say that the property will sell quickly or even that when it does sell, it will bring in as much as you want. The market may let you down on this occasion.
It has to be accepted that this could be one of the biggest investments you will ever make and you have to leave enough money in other places to cover emergencies that might arise. For someone who is sensible and does not stretch themselves this will not be a problem and they can start to build up an impressive list of properties to rent out.
As with most things the first figure you see may not be the one that you need to raise. There will not just be the price of the house, but also the fees to pay to the people who are involved in the process. Regardless of whether you are buying or selling there will be costs involved. You will also be taking on a big responsibility as the owner is responsible for repairs and maintenance. The good thing here is that the more work that is carried out, the higher the value of the house will be and the less that will need to be done next year.
If the property is not bought outright there is the need to make sure that the funds are available to allow the monthly payments to be met. Failure to do this could mean that the property is taken away from you and a lot of time and money can be lost.
It may have seemed that there are only problems when investing in property but that is far from the case. The people who struggle are the ones who don’t check things out and don’t look to the future. The investor who makes sure they know what is happening before they put pen to paper will have a much better experience.
If you have an idea that a buy to let property is best for you then you should read up on it and find if you fit the criteria for making this sort of purchase. If you want to have something that you can touch rather than figures on the stock exchange then this will be the sort of thing to look for. If you have money that you know you will not need in the near future and are looking for a way to make more, then you could again be looking at buy to let. There will be time needed to manage the property and this is something that could also have a time implication, but so many times the early fears are unfounded and the deal runs smoothly.
If you asked a number of investors why it was they were investing in real estate they would all give different reasons, but there will also be a theme running through it. Many will want to diversify from what they often invest in and when the market is good, will buy properties and wait to bring in the revenue. If prices do drop, there will not be any extra expense incurred and within a period of time they should rise again. If there is the need for funds then the property can be sold, and if not, can be still owned and more of a revenue stream will be created.
Income is the main reason that a lot of people choose real estate and when there is the option of getting a regular income, and knowing what that will be, it is a very attractive proposition. There has been a long period of good returns and there is no reason to see what that should stop in the near future. Many feel safe in the knowledge that they will be able to replace one tenant with another and the stream of funds will continue. When one tenant leaves there will be the option to set a higher rent, and even with an existing one there will be an arrangement to say that there can be revues of the rent from time to time.
Inflation changes a lot and real estate can be compared against this as there are rarely times when the rate of inflation is higher than the rate at which rents can rise. This is ideal for the investor as it means that capital that has been invested will not be lost as a result of prices rising in other areas.
On a holiday island such as Cyprus there are many opportunities to invest in property. It could be residential or commercial and both will do well. There is little that is likely to happen that will prevent visitors, so the scenario of a villa that may not be let, or a restaurant that may not get many customers is not very likely.
Villas will be ideal either as a holiday home or as a rental property. The island is a tourist trap and we all want somewhere special to stay. At times the property can be both, but it is important that this is made clear. The mortgage could be affected by things such as insurance and tax that needs to be paid. Sometimes there will be the difference between a holiday home that a family uses most of the time and a property that is rented most of the time but the owners do spend a bit of time there when they can. It is best to be sure what you are planning from the beginning as changes can be made, but will be an additional expense and poor use of time.
Commercial properties are important and rental can be just as good from these. If there is enough for a hotel then it will be a good return that is received but there can be expenses here. If it is going to be a family run hotel then it will be a lot different to one where all staff will be recruited. As well as the cost of the building and running of the hotel, including staff wages, there will be the responsibility of the owner to make sure that everything runs smoothly.
To take some of the load and strain from the owner, there are management companies who will organize everything and this is going to be a great help if the owner does not live in the country. As well as the day to day running of the hotel, they will arrange everything from the employment of staff to the bookings, to arranging that the food is delivered and the pool is cleaned when it should be. There is, of course, a cost for this but it will be a lot cheaper than trying to arrange it all from another country.
For many people there is another reason for deciding to purchase real estate in Cyprus. As they are a member of the EU there is the chance to gain EU citizenship. This does not come right away, and at times there will be conditions but it is one of the easiest way to gain citizenship.
The minimum amount that can be invested in order to qualify is 2 million Euros. This is the same regardless of whether or not it is a residential or commercial premise that is involved. This however does not have to be all spent on the same property so it will also be a good way to build up a portfolio. As you would expect there will be the need to own a passport and not have a criminal record and one of the most important issues is the ability to prove that the funds are clean and have been gained through honest pursuits.
There is a fact that makes it easy to deal with Cypriot property companies and that is the fact that a lot of the properties that are being purchased so as citizenship can be granted and that is that there is often a lease agreement arranged when the property is purchased. This will cut down the time that it will take to go through the process, and as a result the property could be owned in just 3 months. This is much quicker than it will be for purchasing elsewhere and any other investments that are completed that quickly may not have all the benefits that property investment has.
At the moment there are certain places where there are guaranteed percentages given when it comes to returns. This clearly makes real estate much more credible and attractive than something such as stocks and shares. At the moment figures of around 3% to 5% are being mentioned and while this will not always be the case, - 2 years are being mentioned - at present it is proving to be enticing.
There is also the fact that the lifestyle that can be enjoyed when real estate has been purchased is not to be minimalized. The island has a low crime rate, wonderful weather and there will be the chance of a good education for children. Residents are friendly and welcoming and fear that there could be a link to the Greek economy has been denied as the country runs its own finances. If there is any other reason needed, then it is to be noted that the onshore corporate rate of tax in Cyprus is just 12%. This low rate will not be found anywhere else.
There is also a possibility that Cyprus has a large oil and gas reserve that had not been known about in the past. In order to discover how important this find is, there will be many wealthy people taking an interest in land as well as many foreign surveyors and experts who will want to live somewhere nice. A cheap hotel will not be enough for them and as it could be a long term exploration there could be funds coming in for years to come.
There can be no doubt that real estate is a great investment.