People didn’t always invest in property as they do now. Prior to the early 1980s property ownership was not widespread in the UK. Even though a reasonable number of people owned their own property, in general property ownership was the preserve of the middle classes.
However, that all changed with Margaret Thatcher and the ‘Right to Buy’ council house scheme she promoted, which gave people the right to buy their council houses at a discount.
Since this time property ownership has become a bit of an obsession amongst people in the UK and because of this obsession we currently lead the way with property ownership in Europe.
Following on from our leadership of property ownership, most people in the UK now understand that even though the property market has the occasional dip, it has been going up in value for hundreds of years.
The fact is that the property market has always recovered from any dips. Furthermore if you’re a buy-to-let property investor, as long as your properties are kept tenanted and are producing monthly positive cash flow, then you’re fairly safe anyway. This is reason enough for many to decide to take the plunge and invest in property.
|You may be shocked to find out that an average semi-detached three-bedroom in Birmingham for £150,000 was worth only about £5,000 back in the early 1970s.|
If you become a professional buy-to-let investor, as long as your property produces positive cash flow, or at least breaks even, you don’t need to get caught up in the day to day rise and fall of the property market.
History proves that long-term it is wise to invest in property since historically property goes up in price; in fact statistically, property doubles in value every seven to ten years. So,compared to any other investment vehicle, property is very safe, plus you can be in control of your investment and you don’t have to trust a fund manager or some other professional to monitor it and get it to grow for you.
Why you need to invest in property as quickly as possible.
If we take the example of the property in Birmingham that was £5,000 in the early 1970s and is worth about £150,000 now. That means that even if you bought the property on an interest only mortgage and, therefore had never actually paid any money towards the capital, hence you still had the £5,000 owing on the house, due to price rises you would now have £145,000 of equity in the property.
Now imagine back in the 70s you had a brain wave and thought you would buy two more identical properties and rent them out and you managed to keep them tenanted for the majority of the time. You would now have £435,000 in equity.and this was just from buying two extra properties – not hundreds just two.
Are you beginning to see why it makes sense to invest in property!
Now you may think that things were different back then and that they could afford to do that because they had lots more disposable income.
Well you would be wrong, if you speak to anyone over the age of 50 who has had their house since the 70s the majority of them will tell you how they had to scrimp and save to pay for the house and to make ends meet.
Sound familiar? Well it should do, because it is exactly what people are having to do today.
Why do you think the majority of people didn’t buy two and three extra houses back in the 1970s? Could it possibly have been that just like today they thought that the house prices couldn’t possibly go up any further and because they knew they and everyone else they knew where struggling to pay their mortgages as it was?
Do you think some of these people are kicking themselves now? Many of them are at retirement age and are rueing the day they didn’t take a bit of a risk and go against the crowd and buy even that one extra property. They now realise that if they had decided to invest in property and had bought even one extra property this would have possibly been enough to ensure they have a financially secure retirement.
You see, nothing really changes under the sun. Today is the right time to get into property just like the 70s was. The only question is: Are you going to recognise the facts and accept them? Or are you going to let others make all the money, while you sit and ponder for another ten years and then kick yourself at the end of it all saying,
Why didn’t I start buying property ten years ago?”
|By the way, if you had bought those two extra properties and now had £435,000 of equity in them, you could easily draw out a large portion – lets say £200,000, tax free to do what ever you wanted with.|