Besides leverage, the second reason property is a great asset is that it combines two forms of return: long-term capital growth and regular income (rent). Cash gives you income alone (interest); shares can give you capital growth and only sporadic income (dividends). As discussed in our goal exercise, your property goal might mean that you prioritise income or growth, but … Read More
How leverage works in property investment
Why is buy-to-let property such a good thing to invest in? The answer lies in leverage, also called gearing. As the word suggests, it acts like a lever: if you apply a small force (your deposit) to a lever (your mortgage), it amplifies the effect (your return). In a rising market, this catapults what would have been ordinary returns into … Read More