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Buying property can be an excellent investment and property investment has actually made more millionaires than almost any other business. Why? Because usually you invest a certain amount into purchasing a property and the rest is paid for by a mortgage, and so if property prices rise by a higher interest percentage than the interest percentage charged on your mortgage you will be quids in.

Example Property Return on Investment

As your property increases in value the monies owed stay static or reduce and this should create the following investment results.

* Property Purchase Price = £100000
* Your Own Capital = £30000
* Mortgage = £70000
* Example: 5% increase in property price per annum
* Property Valued and Sold for £127600 after 5 years

If you have taken an interest only mortgage for then £70000 is repaid to the mortgage lender leaving you with £47600 a profit of £17600 (less property sale fees) in 5 years a 58% total return.

During the 5 years you may have decided to either live in the property yourself or rent it out to cover the mortgage interest payments, the choice is yours.

You may choose to buy property in the UK with the intention to renovate and then sell the property on at a profit. However, you may decide to keep the property on and rent it out to tenants. Alternatively you might want to consider buying a cheap property in France or Spain or simply a place in the sun to use as an overseas property investment which can be used as a holiday villa for you and your family as well as being rented as a holiday home throughout the rest of the year.

Which ever option you decided to take, always ensure that you have researched your purchase and if required sought advice from one of the many established property investment companies. To ensure that this is the best property investment, make sure that the property is of sound build and if you want to rent it out ensure that it is an area which would receive a good rental income. In other words, put as much thought and consideration into buying your investment property as you would into your own home, including (if in the UK) local schools and accessibility to public transport as these factors can affect the resale value and rental income you could earn.

Property Investment Tips

* How quickly would you like to see a return and how much risk are you willing to take
* Where your capital will come from
* Insurances
* If taking a mortgage have this agreed as early as possible to ensure that you are not disappointed
* Location
* Purchase Price
* Housing Market current trends
* Local area
* Rental potential
* Property condition
* Your abilities (ie: don't take on a project which is too big as this could end up costing you money)
* Be realistic on your return
* Be thorough in your budget planning
* Look for up an coming areas where you can buy cheap properties now, but expect that the prices will soon rise. This could be due to popular neighbouring towns, the town being regenerated, supermarkets opening, or better public transport or road links being planned.

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