Property

Many people choose to buy a property as an investment for their retirement. Property is considered to be a relatively secure investment, since house prices tend to rise over time. The price that you pay for a house will generally be lower than the price you are able to sell it for, and the profit you make is the return on your investment. If house prices rise significantly, you stand to make a great return; unfortunately there is no guarantee that house prices will rise, nor that you will be able to sell your house for the asking price, and so you could end up losing money on your investment. For this reason it can be very risky to buy a property only with the intention of letting it out until you wish to sell it. People do make money in this way, and some have made a lot, but the costs involved in maintaining a property combined with the uncertainty of the housing market mean that property is a far from risk-free investment. If you are choosing to buy your own house or apartment and aim to live there before selling the property in the future, this may prove a wiser investment over time: in the long run you will save money on rental costs and you will be able to sell your property in the future when prices should hopefully have increased.

There are different ways for you to invest in the property market; you can buy a house or an apartment outright or using a mortgage, you can invest in a fund which in turn is invested in property or property companies or even purchase a holiday home or a hotel room and enjoy a rental income. There are a range of potential investments, but usually only one or two will be suitable for you. Remember to consider the advantages and disadvantages of each option before making a final decision. If you choose to borrow money in order to purchase a property consider whether you will be able to make the repayments, for how many years you will be in debt, and the effect that any economic crises could have on the value of your property and the terms and conditions of your loan.

House prices do tend to rise over time, and so investment in property can seem to be a reasonably safe bet; usually property will prove a wise investment if you have enough money to afford the deposit and the mortgage payments and you are not in a hurry to make money. If your aim is to buy and sell in a short period of time with the aim of 'getting rich quick', be prepared that you may face difficulties if the property is slow to find a buyer or house prices begin to fall. Do not rely on property alone to provide you with a retirement income in later life; although it is extremely unlikely that property will ever become worthless, you may discover that huge investment returns are not as easy nor as common as you had assumed.

For more information on buying property ask a local estate agent about the procedure involved, current house prices and fees, but remember that they are aiming to sell houses and thus may not present an objective overview. Consult an independent financial advisor before making any binding decisions.