There are many reasons why property investment is so popular and why indeed it will remain popular for many years to come. We will now take a look at the make-up of the worldwide real estate market and why indeed property investment will remain at the forefront of personal and corporate assets.
The worldwide population is growing
This is perhaps one of the simplest reasons but also one of the most powerful reasons why the worldwide real estate market will continue to grow in popularity. If you look at countries such as the UK, where there is limited landmass and a population which is growing, the simple fact is that property in popular cities and towns will become more sought after in the future.
Property is the most popular personal asset
While we have seen many articles suggesting that first-time buyers are now struggling to climb aboard various property ladders around the world, property is still the most popular personal asset. It is something which you can leave to your family, offers support in times of financial trouble and many people strive to own their own property.
Quote from PropertyForum.com: “Should UK homebuyers be looking overseas for their first investment?“
Renting is increasing
Despite the fact that countries such as the US have seen a significant switch from renting properties to owning properties are right, the exact opposite is happening in other countries. The UK for example has seen an increase in property prices which has priced many out of the market thereby forcing them to rent. Demand for rental properties places further upward pressure on real estate values thereby creating something of a vicious circle.
Governments will always protect property
While many business models and business ideas come and go, governments around the world are in many ways pressurised to protect those with property. The simple fact is that property is by far and away the largest asset in many countries and thereby a reluctance to protect property markets will impact upon voting intentions and can make or break governments. There are various ways to protect property but the fact remains that politicians will always have one eye on the property market.
Consistent long-term returns
While rental yields can vary from an average of around 5% to anywhere in the early teens the fact remains that if you choose an area which is popular with commuters then it is possible to create a consistent long-term rental income. Stocks and shares rise and fall, as do other investments, but history shows that in the longer term the rental yield and total return on properties is greater. This does not mean you can buy any property and you will see long-term consistent returns but if you choose carefully, in sought-after areas or up-and-coming areas then there is the potential to create a useful long-term income stream.
As with any investment you need to take professional financial advice to ensure that you are taking the right action for your specific financial circumstances. Property investment should be seen as a long-term investment with funds which you would not normally require at short notice. Location, location, location is obviously vital as is the way in which you manage your property assets.