5 Feb, 2023

Is Purchasing A House A Good Investment? Pros And Cons

Is Purchasing A House A Good Investment? Pros And Cons
Written by: - Phil Baker

If you are considering investing your money, then it is likely that you have thought about purchasing a house. Getting on the property ladder is an aspiration for many people, and it is something that we are all encouraged to do. This is primarily because property is seen as a “safe” investment in comparison to other investment routes. 

But, just because purchasing houses has been the way that society in the Western world has run for many years, that doesn’t necessarily mean that it is the best way to invest your money. In today’s society, many people are renting much later in life than previously, so could this be because property isn’t as good an investment as we once thought?

In this guide, we’ll be taking a look at whether, or not, purchasing a house is a good investment. We’ll also take a look at the pros and cons of property as an investment to help you identify if this is the best route for you. 

Keep on reading to find out more! 

Also read: How To Organize Your Financial Records In 5 Easy Steps

money plant

Is Purchasing A House A Good Investment?

So, first things first, is purchasing a house a good investment? Well, there really is no denying that property is an excellent investment route, and that is what makes it so popular. Property has been a safe investment route for many years, and it is the security of this that attracts many investors. 

Property is considered a safe investment because it is an investment route that comes with a physical asset. Unlike investments in stocks, shares or crypto-currencies, when you purchase a property you will physically own that property, and the tangibility of this asset makes people feel more secure purchasing a house.

Of course, property investment is by no means plain-sailing. There are lots of drawbacks of investing in properties. So to help you identify if this is the right investment route for you, let’s take a look at the pros and cons of investing in property.

Also read: How To Invest In Gold For Beginners

person on laptop

Pros of Purchasing a House

Let’s start off by taking a look at the benefits of purchasing a house as an investment. There are lots of pros to purchasing a house, so let’s take a look at some of the biggest benefits associated with this. 

Also read: How Much Do You Understand Tax On Bonuses?

 

Security

Property investment is an investment route that allows you to purchase physical assets, and the tangibility of this can bring security to your investment. 

But this isn’t the only thing that makes property a “safe” investment. The housing market generally only appreciates, so it is very likely that you will lose money on your property. The only time that you may lose money on your property is if you purchase when the market is at an all-time high. However, even then, you will likely be able to break-even on your property or make money if you are willing to hold onto it for some time. 

Also read: 8 Best Payroll Services Companies In 2021

 

Steady Cash Flow and Passive Income

If you purchase a house as an investment route, it is likely that you are doing so in order to add it to your rental portfolio. Renting houses out is extremely lucrative and a great way to make profit, and generate a steady cash flow through passive income. 

If you are looking to boost your monthly income, then purchasing properties and renting them out is a great way to do this. Buy to let properties can allow you to build your property portfolio fairly rapidly, and this is one of the most common property investment routes that people choose. 

 

Great Returns

As well as buy to let properties, a lot of people also make money in the property market by flipping properties. Flipping properties consists of purchasing a property that requires renovation work, doing the work at a low cost, then selling the property on for a much higher profit. 

If you are a bit of a handyman, or you work in a trade, then flipping houses is a great way to get an excellent return on your investment. It requires a lot of hard work, but it is totally worth it when you sell that property for considerably more than you paid for it. 

 

Cons of Purchasing a House

Now that we have taken a look at some of the key benefits of investing in properties, let’s take a look at some of the cons of purchasing a house. 

 

High Fees

There are a lot of fees associated with investing in property that are not included in other types of investments. In particular, legal costs and brokerage fees can really increase the amount of money that you have to spend on a property. These fees are often something that you don’t consider when you first start looking at properties.

 

Time Delays

In addition, there are a lot of time delays associated with purchasing properties that are not associated with other types of investments. You will need to wait weeks, or even months, in order to get the keys to your property, and you will often be faced with constant delays. This can be frustrating and it really is one of the biggest drawbacks of property investment

 

Maintenance

Finally, when you purchase a property, you are then responsible for the maintenance of that house and any work that it requires. While you can do surveys and get checks to see how much work is required before you buy, there are always hidden costs associated with owning a house. 

No matter whether you are purchasing the house to live in yourself, or to rent out, or even just to flip, that maintenance will fall to you. And you will have to foot the bill for the work that is required.

Also read: How Many Credit Cards Should You Have?

notebook

Summary

In conclusion, yes, purchasing a house is a good investment. There are tons of benefits of investing in property and they aren’t only associated with the money that you can make from this type of investment. Check out the pros and cons in the guide above to find out if property investment is the right route for you. 

No matter what type of payment methods you’re dealing with it is also important that any pay stubs involved are of a high quality and can be produced with ease.

Thanks for reading!

Create Your Pay Stub Now!

It takes an average of less than 5 minutes.

How are you paid?
Employment status
Select your state
Virginia
Create your paystubs in 4 easy steps
Your Pay stub Sample in black and white

Hi! How can I help you? Kris

Hi, there!

How can we help today?

Before we begin, please provide us with some quick information to assist you better:
Start the chat