Amidst all the doom and gloom, you might be wondering if property is still a good investment in the months and years ahead. We’d argue the answer is ‘yes’ - but the situation is certainly different than what it was, and there are some pitfalls to watch out for.
Indeed, there are still likely to be lots of lucrative opportunities in the current climate, but when building any portfolio it’s going to be more important than ever to carefully research and seek out the best property types, locations and sectors offering the strongest yields.
Is Property a Good Investment?
Despite all the economic negativity, property remains a very popular investment option and offers a number of advantages that have long continued to attract new and experienced investors alike - including long-term capital appreciation, regular income and lots of opportunities for portfolio diversification.
With talk of falling property prices on the horizon, it is important to remember that property has historically been a very secure investment delivering long-term capital growth, with property prices usually rising over time and often outperforming many other investment types over a given period.
Indeed, there are always opportunities out there for experienced investors. For example, the months and years ahead could be a great time to acquire property assets, with increasing numbers of properties on the market as homeowners struggle to obtain mortgages or even look to downsize to smaller properties that are cheaper to run.
In addition, rental demand is also on the rise, especially for the best properties in prime locations with stronger rental yields. At Avora Capital, we spend a great deal of time carefully researching the best assets in highly performing sectors as we expand our property portfolio.
Of course, there are potential risks to be aware of, not least rising interest rates and mortgages repayments that are squeezing buy-to-let profits. That’s one reason why it can make sense to seek out investment opportunities that can be made without directly acquiring properties or obtaining a mortgage, like Avora Capital.
Location, Location, Location
As we just touched upon, finding the right property types in the best locations is a critical part of any successful investment strategy and unlocking the best yields.
When building our own asset portfolio, location is one of the most important considerations for generating the strongest possible returns. For example, northern cities like Manchester, Liverpool, Newcastle, Leeds and Sheffield often outperform their southern counterparts.
Property Sectors
Property sectors are another critical consideration when building an asset portfolio, and it’s often sectors away from traditional private residential properties that may offer the most lucrative returns.
For example, one sector we continue to invest in is social housing, where severe property shortages have resulted in exceptionally long tenant waiting lists and social housing providers scrambling to find solutions to the crisis, including acquiring residential properties from investors.
What About Buy to Let?
With the soaring cost of mortgages and higher tax bills combined with increasing and constantly evolving legislation, it’s safe to say that many private landlords are finding the current climate extremely challenging.
Now that the decades of soaring property prices and historic low interest rates look to be over, many would argue that buy-to-let is no longer the golden proposition it once was, with investors turning to hands and mortgage-free investment options such as property portfolios.
Final Words
Property investment can still be a lucrative investment option, but it’s more important than ever to do your research and uncover the best sectors and locations when considering any investment proposition.
At Avora Capital, we like to think we do the hard work for you, building a lucrative portfolio of property assets and offering investors the chance to earn a share of the income without many of the drawbacks associated with buy-to-let. For more information on Avora Capital, please contact us today and we will be happy to discuss the details with you.
Important note: The information provided in this article is general in nature and does not constitute personal financial advice. If you are unsure whether an investment is right for you, please seek professional advice. If you choose to invest, the value of your investment can both rise and fall so you may get back less than you put in.