Prices can make your mind make funny justifications. It’s not prices on their own though. It requires your bias and your emotion. And without thinking, you can end up on the wrong end of the stick.
There are many reasons not to own an investment property. People will share these with you whether you ask or not.
But a property in an area that is reasonably desirable, or is likely to continue to grow, can be an excellent investment.
For example, in the UK, property tends to double in value, on average, every 10 years. So, if you buy a £600,000 property with a £450,000 mortgage (75% loan to value), it should be worth about £1.2 million in 10 years and £2.4 million in 20 years.
Imagine that. One property that you put £150,000 down on as a deposit, could be worth about 4 times it’s current price in 20 years. That would leave you with nearly £2 million in equity.
That’s more than 10x on your money. You may also have received some rent in that time period too. Add that into the mix.
Now imagine that one property helped you buy two more at £800,000 on the 10th anniversary. And they went up similarly. And their mortgages stayed static. You could have about £4 million in total equity after the 20 years. Just three properties could change your life and whole financial circumstance.
Think it through. Or ask. But make it work for you. Because property can make you wealthy.
