Provided you have enough savings to cover emergencies and important life events, investing can be a very good idea. Of course, investments come with an element of risk. Your capital is not protected in the same way it would be if it were in a UK savings account. But, there is the opportunity to earn a bit more interest and make your money work harder for you. So, everyone should at least look into the idea of investing some of their cash.
For many years now, the property market has provided a particularly good level of return. Provided prices continue to rise, this should carry on being the case. So, today, I thought I would share with you some ways to .
As you will see, not having enough capital to buy a flat, business unit or house outright need not stop you. Not having enough regular income or being too old to secure a mortgage for yourself does not necessarily need to stop you either.
Buy with friends and family
Clubbing together with friends and family and buying can work. Generally speaking, the fewer people who are involved in the purchase the better things will go. There will be fewer disputes and the legal paperwork will be relatively simple.
If you do decide to go down this route, seek legal advice. Get a solicitor to draw up a legal agreement that everyone involved signs. As a minimum, it should state what percentage of the property each party owns. What the split is when the property is sold. How you handle repairs, people defaulting on payments or wanting to sell their share. (though based in the US) goes into more detail about the pros, cons and potential pitfalls of buying in this way.
Invest via a property investment company
If you do not know anyone who is interested in investing in this way or are worried about how complicated there is another way. Across the world, there are investment companies that are involved in funding property developments and purchases. In its simplest format, they take the money you invest and lend it to those involved in the property market. It could go to a developer who needs seed money to enable them to start building work. On the other hand, it could go to someone who is turning a block of offices into housing.
Either way, part of the interest they pay is returned to you along with your capital. Of course, there are risks. If their project does not work out you may lose some of your capital. Usually, the loan is secured against the building or land they already own, but, not always.
So, as with any investment you need to be sure you understand the risks. That is why you should always seek advice from an independent financial advisor. If you are in the UK, look for one that is registered with the FCA. Double-check their database to make sure they are actually on the register and not just saying that they are.