You've earned the money in your savings account. You've earned it through hard work and diligence. Now it's time for you to use that money to secure your financial future. Unfortunately, high interest savings accounts are not the best way to do that. Rates are just too low.
If you are looking for a new investment opportunity, look no further than buy-to-let properties. When you purchase rental property, you can make more money with each individual investment than you can with a high interest savings account.
Let's do the maths just to see what a difference investment property can make. We'll start with the high interest savings account with an average yield of 2.5%. By the way, that's a generously high return. Most savings accounts offer returns somewhere between 1% and 2%.
Let's say you were able to put away £500 per month in an ISA. At 2.5%, your annual £6,000 contribution would earn a mere £150. That's not much.
Now let's say you invest that same £6,000 in a buy-to-let property. Most mortgage lenders insist property investors be able to collect an amount of rent equal to at least 125% of the monthly mortgage payment. Again, we'll assume a mortgage payment of £500. The investor would need to collect £625 monthly.
Assuming landlord expenses amounted to roughly £100 per month, that would leave £25 every month as profit. That amounts to £300 or 5%. The rate of return from the rental property is twice what you are getting from your high interest savings account.
It might seem like £300 annually is not worth it when you consider the fact that you have to put time and effort into rental property. However, remember that your mortgage will eventually be paid off. When it is, your return on investment substantially increases.
The idea behind investing in rental properties is to view them as a long-term investment. With every property you purchase and pay off, your return grows greater. There's no way even the best high interest savings account can compete with rental property.
Should you decide your properties should be sold upon your death, your estate will benefit from the equity you have built into your investments. Should your survivors continue to rent out properties rather than sell, the residual income and high yields continue uninterrupted.
There was a time when investment properties were looked down upon as an unfavourable investment because property values were high and mortgage approvals were easy. However, all that has changed. The current market makes right now an excellent time to get involved in investment property.
Below-market pricing, very attractive interest rates, and a fairly large inventory provide plenty of opportunity for even part-time investors to make money. That's where Fruitful Property comes into play.
If you are ready to do better than high interest savings accounts, Fruitful Property can help you locate dynamic properties that will add real value to your portfolio. We have provided clients with hundreds of top-notch properties over the years. So much so, many of them continue to buy multiple properties through us.
What are you waiting for? Call us and get started on the road to a secure financial future through property investment.
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