Can Investing In Property Help You To Become Financially Free?

investing-in-propertyInvesting in property may take very good credit and a hefty down payment upfront, but the rewards can be tremendous. Countless investors have found themselves on their way to financial freedom after a successful property investment, but it all depends on what your individual goals are.

  

Know What You Want

It’s important to set goals, especially when it comes to finances. Ask yourself what you hope to achieve with property investments. Do you want to earn enough rental income to cover your own monthly mortgage payments? Are you hoping to flip houses, working your way up the property ladder until you can buy your own dream home? Do you want to retire by the time you’re 50?

 

Not all of these goals will be achievable in every circumstance, but it’s good to have your own definition of financial freedom because your idea of being financially free may not be someone else’s.

When making a goal, decide on something reachable. Retiring in 10 years sounds like a dream, but is it feasible? You may want to buy a historical property to create a posh apartment building, but is it wise to dive right in with that kind of loan weighing on your shoulders?

Sometimes, the answer to these questions is yes, but at other times you may need to scale back your goal. Rather than an entire apartment building, maybe you should consider buying a duplex first.

Working Toward Financial Freedom

Investment financing is different from buying a home. The majority of people who would love to invest choose not to because they think they need to purchase properties with their own money. This isn’t the case either.

A property investor usually needs just 10% of the purchase cost to receive financing for a property. In some cases, loan terms may depend on potential rental income. This means that the amount of money you intend to charge tenants will be considered in the loan process. For more information click here for details on buy-to-let mortgages.

While many investors turn to the stock market, property investing remains stable and offers excellent returns that are fairly predictable. What’s more, rental costs tend to go up every few years, if not every year, so rental rates can be adjusted frequently. This means more income to pay down the investment loan.

One reason this type of investment is so appealing is that no other investment allows you to make a purchase with the bank’s money, then turn around and pay the bank back with other people’s money – in this case, the tenants. There is very little money needed upfront, which means less risk involved.

Since property value will always appreciate over a number of years, even after brief periods of depreciation during a recession, selling a property ten or twenty years from now will make you money and usually this amount is substantial.

Countless investors have found their way to financial freedom through property investing, so consider it as a possibility when trying to figure out how to save money and reach your own financial goals.

This post was written by Andreas who works for moneysupermarket.com .

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Category: Financial freedom