When it comes to investing in property there are several investment opportunities available to you. Different types of investments offer their own advantages and disadvantages and will be suitable for varying circumstances. While buy-to-let and off-plan investments are common and well known in the investment industry, property bonds are becoming increasingly popular. So, what exactly is a property bond investment and what makes it an enticing opportunity?
Certa Invest have provided some of the main reasons for why property bonds are becoming an increasingly popular type of investment among property investors.
Why Investors Are Opting for Property Bonds
A property bond is effectively the process of investing in the development of a property as opposed to a completed property. This type of investment is seen as an ideal opportunity for both developers and investors for their own reasons. The developers can use the investment to partially fund the development project while investors will receive returns during the early stages of development work. In simple terms, a property bond can be seen as a loan that contributes to the costs of developing a property.
Investing in property requires strategic understanding and experience so that you can make calculated decisions. Any type of investment comes with a series of potential risks for the investor. Property bonds are often seen as one of the safest forms of investing for several reasons. They are usually secured against a physical asset with a current value. Should the bond issuer go out of business or fail to meet the financial agreements of the loan, the investor can legally claim the value.
With the ongoing uncertainty in the United Kingdom over leaving the European Union, there has been a decline in property investments in the country. As a result, some investors have identified property bonds as a solution for gaining a healthy capital income. As interest is paid at a fixed annual rate through regular payments or net capital gain at the end of the investment, the rates would be the same regardless of an economic slowdown. An early exit clause may also be included which means that the investor can receive their initial investment earlier than expected.
One of the biggest benefits of investing in a property bond is, as we have mentioned, the fact that you are investing in a development. This means that you don’t have to deal with the hassle of managing a property portfolio. You don’t have to concern yourself with day to day financial issues such as maintenance fees, insurance and tax. You can simply invest the money and receive your income returns knowing that you don’t have to worry about the complexities of building, selling and letting a property.
If you are looking for high-yield property investments in Liverpool and further afield, Certa Invest have you covered. They are an experienced property investment company with speciality in providing a range of off-plan, buy-to-let, student and alternative investment opportunities.
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Daniel Peacock