There's no doubt that some investments are subject to higher amounts of risk than others are. Even savings plans are risky to some degree. In order to maximise your return on investment you need to consider risk any time you place your money in something new. A good way to reduce your investment risk is to place your money in property.
Property, like all investments, has potential risks as well. At Fruitful Property, we take a strategic approach to risk management. This includes developing individual risk management strategies with each client to make their money work hard at minimal risk.
The major potential risks of property investment include:
Understanding these risks and having a clear risk mitigation strategy is an essential part of any informed investment decision.
For some reason, power investors prefer to place their money in more exciting vehicles. Stocks and bonds are good examples. However, history shows that stock markets are much more volatile and bonds a lot less reliable. It is not that stocks and bonds are a bad investment, but they are too risky and unreliable to make them the centrepiece of a high-yield investment portfolio.
Why does property offer better returns with lower risk? Well, there are two primary reasons.
First, property has historically increased in value over the long term. Even during sustained periods of economic malaise, as we've seen in the UK, property values over 10 or 20 years remain fairly stable. In most cases they rise.
Second, as long as there are people, there will be a need for housing. Property offers the opportunity of investing in something that will return a monthly income year after year. In addition, as a rental rates go up, so does your income. All of this translates into a very good return with a very low risk.
When you get right down to it, purchasing property is the best way to reduce your investment risk and benefit from compound capital growth at the same time. The secret is to invest in rental property; you do not want to purchase property with the intent to turn around and sell it within six months.
When you buy rental property, you are building a portfolio based on a long-range strategy. Most investors expect to hold onto a property at least for 10 years; some hold on much longer. With every passing year your debt load is reduced, your equity rises, and your rental rates go up. This represents compound capital growth unlike any other investment.
Risks aside, investing in property still is the best way to reduce your investment risk without hurting your yields. If you want to know more, Fruitful Property is more than willing to help you get started. Our years of experience and proven search methods combine to ensure we source only the best properties. We want to help you succeed as a property investor. But you have to contact us first.
Rich Dad's Cashflow Quadrant
a compelling explanation of the core financial principles of behind being successful in work, business and investing.
exciting and practical insight into the business skills and sports psychology behind how England won the Rugby World cup in 2003.
The Art of the Deal
like him or loath him, Trump shares his story and the drive that created a self-made billionaire, mainly from property.
FT Weekend Money supplement
essential weekly reading for UK investors wanting to know the best ways to invest and protect their money.
Renting Out Your property for DUMMIES
straightforward advise and practical checklists for managing all aspects of your UK rental property.
inspired stories and life lessons from the man who created Apple and then changed the world twice!
sage advice on business and leadership by the arguably the greatest business leader of the 20th Century.
“I have bought 6 investment, buy-to-let properties through Fruitful in the last year (starting in 2012). They form a key part of my financial plan to generate a future pension income…
As a Management Consultant and former Banker, you’d think Jonathan Fryza and his wife Ruth, a Risk Manager at RBS, with over 50 years’ experience between them, would be able invest…
got a quick question?
We're here to help! Just fill in the form below and we’ll get right back to you.
Access off-market, high yield investment properties.
Act now. Profit from a recovering UK property market.
Are your investments working as hard as possible?
Earn 15% annual return on your money with off-market bank repossessions.