Depending on what you read, investing in property is either the smartest investment you can make and a licence to print money, or it’s full of pitfalls, suited only for experienced investors.

The truth, unsurprisingly, is somewhere in the middle. Here we take a look at some of the pros and cons.

Pro: You have a physical asset

Invest in shares, or a kickstarter project or your mate’s business and you could end up with nothing. If the worst happens and the company fails, then there is nothing left. A lot of shares of nothing are still nothing.

But invest in property and there is a physical asset with ongoing value. Yes, property prices can go down as well as up, but bar natural disaster or major accident the bricks and mortar will remain in situ.

Worst case scenario – you’re left with a building with some value. Worst case scenario when investing with shares – you’re left with a certificate.

Pro: Two ways to make a return (rent and capital growth)

Invest in property and you can profit both from renting the property out if yields exceed all the costs (mortgage and maintenance for example), and also from any increase in property value.

An investment strategy is normally based on the expected rental returns, and most landlords would be loath to give up a property which helps supply a steady, ongoing income.

However, capital growth means that if circumstances change and a lump sum is ever required, selling can lead to a healthy profit. And even without selling, the increased value allows for equity release and the potential to access funds to invest in expanding a property portfolio.

Con: An investment which requires hard work

While there can be healthy returns from investing in property, they don’t come easily or automatically. Why should they?!

Property investment is increasingly competitive, you’re not going to stumble across a hidden gem of an investment and face no competition.

To find investment-worthy properties takes research, both into the area and individual property. If you’re willing to invest wherever promises the best yields then you’re going to have to find out all about the potential postcodes – what type of tenants will you attract, how might the area develop, what happens if the main employer pulls out?

And then there is ongoing work, property maintenance, researching where to reinvest profits, analysing market trends.

If you want an investment where you just move some money across and then largely forget about it, then is property investment for you?

Con: High price of investment

To invest in property, you generally need a sizeable lump sum. Buy to let mortgages require hefty deposits, the loan to value ratio being far lower than on your typical home owner’s mortgage.

In London, you’re likely to need a six-figure sum to invest, and we can’t think of many places in the UK where you could get a mortgage on a property with less than £20,000 to invest.

Pro: No shortage of opportunity

With property investment, there is always a huge stock of potential purchases, especially if you are willing to invest in any area which your research suggests offers healthy returns.

There is no need to rush into a purchase, and no need to invest in a property you have doubts over.

Pro: An ongoing requirement

Some investments are into flavour of the month products or stocks and at any point the investment could turn toxic if there is no longer public demand for what you’ve put your money into.

This can be true even of the biggest firms. Kodak went bankrupt after failing to adapt to the advance of digital photography, while one throwaway remark pretty much ruined Ratners.

But houses and flats. It’s hard to imagine a time when people won’t need somewhere to live. The virtual world offers a lot, but you can’t sleep in the Cloud.

Con: Need to spread risk

Did you know that 25% of all landlords with just a single property to rent out are not making a profit?

This means that for landlords without the funds to build a portfolio of multiple properties there is a significant chance they will make a loss. All that time researching, that five or six figure lump sum invested and a loss at the end of it?

Look at it the other way, three quarters of single property landlords make a profit. However, we still believe it is necessary to build a portfolio and spread risk as quickly as possible.

With just a single property, what happens if you have tenants from hell, or rental yields drop dramatically because of a local development?

Pro: Relatively stable market

Property investment can be less volatile than other forms of investment. Depending on where you choose to invest, you could have the reassurance of being able to see that rental returns have been healthy for years.

For example, research could show you that three-bedroom terraced houses in a certain street have achieved rents of £700 pcm for the past four years, with the trend heading upwards.

While this doesn’t provide certainty, it does provide a healthy base from which to make truly informed decisions.

Con: No guaranteed return

With some investments there is a guaranteed return. Often this will be at low rates and so appeal fairly unattractive.

However, what are your circumstances? Is a guaranteed return more important or attractive than another investment which could offer a better yield, but could also lead to a loss?

An example of choosing an annuity versus investing in property. We are often asked which is the better option – the answer is it’s impossible to say. Much will depend on your minimum requirements from the investment and your attitude towards risk.


We believe that property remains an investment worthy of serious consideration.

If you do your research, get your support network in place (for example reliable tradespeople for whenever little emergencies occur) and have a plan to help spread risks then the yields can be highly attractive.

About the House Crowd

The House Crowd combines crowd funding and buy-to-let property investing. This enables investors to use their funds across multiple properties and so spread risks, rather than use the same sum as deposit on a single dwelling.

As an example, a £100,000 investment could be spread across 10 properties, with the £10,000 invested in each potentially earning a return based on the overall yield of that property.

Whereas going it alone means that problems on one property could severely effect your entire pension pot spreading the investment of course dissipates this risk.

Going with The House Crowd also means investing in properties chosen by experts, properties picked by people who are experts in the buy-to-let field and have chosen properties with the potential for excellent returns.

You can find out more about us on this site, or Register Now For More Information

Property values can fall. Your capital may be at risk & returns may vary. Read our Risk Warning.