The Pros and Cons of buying Investment Property in The UK

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The question that puzzles many would be buy-to-let investors is where to buy investment property in the UK? There are many novice property investors currently being taken in by the tales of the past glories of successful investors. They are living under the assumption that just by imitating how someone became a property millionaire in the nineties; they can achieve the same level of success today.

There is no disputing the wealth of some of these property tycoons that started their empire years ago. Bright eyed investors watch TV shows and see the kind of houses these people live in and the sorts of cars they drive and then jump headlong into imitating their strategy, without really understanding that the property market is very different now to what it was then.

If you bought a property ten or fifteen years go in almost any location in the UK the likelihood is that the rent would cover the mortgage. These days we don't have such a luxury and every investment decision needs to be taken carefully and prudently adding up all the figures to make sure that you are not going to be out of pocket.

This is the fundamental problem that arises when you purely imitate a strategy from the past without fully understanding what you are doing and the implications of your actions. The TV shows are not realistic. Yes, there is no doubt that these wealthy individuals have made an absolute fortune years ago, but that does not mean that if these same individuals started today from scratch with exactly the same strategy, that they would end up making the same amount of money again.

For example, many investors made their fortune in the nineties through buying off plan properties. At the time they made the majority of their money it was simply a case of putting down a deposit and sitting back and when the time came for completion 12-24 months later you could virtually guarantee a very healthy profit.

This is simply not the case today. Off plan properties have become over saturated, with some developers now building not with the owner occupier in mind, but with the property investor in mind instead. Apartment blocks are coming to completion and are being valued at less than what investors paid for it at the off plan stage.

Many novice and some seasoned investors are being crippled financially because of bad decisions and because they are trying to make money using the same strategies people used years ago. They fail to grasp that a major key with making money from property is knowing your market. Knowing whether it is the right time to buy off plans or to buy established properties, knowing whether the market is right for you to sell your properties or whether you should be renting them out.

Today's investors have to learn how to respect the current market conditions. He has to learn how to adapt to whatever the market throws at him. They have to be exceptional at doing there own due diligence. In today's property market the question should perhaps no longer be - where to buy property? As on paper hardly any areas in the UK make financial sense to buy to let in. The question should rather be, how much below market value can I buy property in any location, so that the figures add up and it becomes financially viable?

Article Source: http://depositarticles.com/

Carlton Johnson is a respected author on various topics relating to personal development and achieving financial and personal freedom. He has recently written an internationally sold book about how to be a success in the UK property market to learn more visit his website at: www.UKPropertysuccess.com

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