Investing can be an exciting venture to undertake and a great way to boost your overall income. Whether you’re trying to save for a more financially stable retirement or you simply want to reach certain financial goals, investing is something everyone should consider at some point in their lives. When choosing the best investment to undertake, there’s a range of options you could go for, with different benefits to each. From property to stocks, here’s a simple guide on how to choose the best type of investment for you.
One of the most popular investment types is property investment, with over two million property investors in the UK alone. There are a whole host of benefits that come with investing in property, the main ones being the opportunity to generate more immediate returns on your investment along with large returns from capital appreciation. If you choose to purchase a property for buy to let purposes, you’ll be able to generate a consistent amount of income each month through tenants rental costs, with higher rental yields bringing in better returns. Then, once you decide to sell your property later in life, you could find that the property has actually increased in value thanks to capital growth, leaving you with an attractive return on your initial investment.
Of course, while property investment can offer some attractive prospects, this is largely dependant on the area you choose to invest in. In London, for instance, the property market is in a declining state, with a decrease in house price growth and low average rental yields of 3.05%. This means that those investing in a buy to let property in the capital aren’t likely to see the returns they’d like. In property hotspots like Liverpool and Manchester, on the other hand, the property market is thriving. Those who choose to invest in these cities can expect high rental returns, a strong level of rental demand, and a lot of potential when it comes to capital appreciation. Some property companies based in the north-west such as RW Invest even offer opportunities with rental yields as high as 7 and 8%, with much more affordable prices than many other UK cities.
While property investment can be a great path to go down, stocks and shares are often the preferred investment type for many. With this form of investment, you’re able to buy small fractions of a company which entitles you to a return on investment if the company’s value rises over time. While stocks and shares allow you to spend less money on an investment, there’s often more risk involved compared to property. Without the right knowledge, you could come out of your investment with less money than you started with. For those who don’t have much cash to spare but are keen to get involved with this type of investment, a stocks and shares ISA is a good option. A number of companies such as Moneybox have started developing app’s for this purpose to provide an easy and hassle-free way for people to try investing, instantly investing small amounts of users money into global companies through simple tracker funds.
There’s certainly a lot to think about when deciding which investment route to take. To put things in perspective, it’s worth comparing the track record of each investment type. For instance, between 2000 and 2017, research showed that the average UK home’s value significantly outperformed the Financial Times-Stock Exchange. While both investment types can bring good results for the investor, information like this suggests that for those looking to make a big impact on their financial status, investing in the UK property market may be the best route to take.