If you are looking for a way to grow your wealth and generate passive income, you might be wondering whether property is a worthwhile investment, especially in Lincoln if you’re from the area, or if you’ve witnessed the phenomenal growth over the last two decades.
With a population of around 94,000 and a diverse economy based on engineering, manufacturing, tourism and public services, this historic city certainly on face value, sets the stage for a fantastic long-term investment opportunity, and always has.
But how does property investment in Lincoln compare with other available options, such as investing in stocks and shares, or just putting all your money in a FTSE tracker? Well, here we look at some of the pros and cons to help you decide which option might suit your goals and risk appetite.
Investing in property or shares and bonds
Firstly, a long-running debate has been over whether investing in property, shares, and bonds is the most lucrative. That’s of course, because each has its benefits and risks.
For many investors, property offers a tangible asset and rental income, while on the other hand, shares and bonds can in some cases provide good returns and certainly more accessible liquidity.
Property investors also need to appreciate that landlord regulations have increased in recent years. which for those landlords looking to manage things themselves could prove more stressful, although our recommendation would always be to have an agent managing these assets, especially if you’re serious about building up a longer-term portfolio.
In recent years, there’s been a lot of comparisons around whether you should get out of property, and invest all your money in stocks, shares and bonds. But the thing to remember is that the media have been talking about this sort of thing for as long as there has been print. It’s important to never take such information at face value and take a long term view, as there will always be ups and downs, but historically property has always ultimately levelled out, and grown over time.
Legislative changes that will shape public perception
The media will always focus on legislative changes that will shape public perception about the ease or difficulty of certain investments – and property investment has been subject to this. However, if you stop to look at the latest legislation, you soon see it usually affects the smallest possible number of people.
Investors should not be focussed entirely on a property’s yield – that’s the rental income’s profit percentage over the property’s cost. Instead, property offers a long-term opportunity with capital gains – that’s the profit made between the purchase and selling price – because property prices have risen consistently over the past 20 years, and that pace increased during the pandemic lockdown.
Property investment in Lincoln
One of the main advantages of property investment in Lincoln is that it is a relatively affordable market compared to other cities.
According to HM Land Registry data, the average house price in Lincoln is currently around £195,716, which is well below the national average for England of £342,297.
It is also below the average Lincolnshire house price of £234,783.
Property investment in Lincoln also offers a stable and consistent source of income with strong rental demand from students, professionals, families and military personnel.
And the city offers good yields since the Office for National Statistics (ONS) says the average monthly rent for a three-bed home in Lincoln is £765.
You can also add value to your property by renovating it or extending it, or by using strategies such as HMOs (houses in multiple occupations) or serviced accommodation. However, in Lincoln these should be considered with caution as there currently is an over supply of this kind of accommodation.
Another point to bear in mind is you shouldn’t be focusing on the yield you’re going to get from a rental income unless you’ve got vast numbers of properties where that’s going to make a huge difference to you. The real value comes in capital gain from properties.
Growing your wealth
Property investment in Lincoln and investing in stocks and shares are both viable options for growing your wealth. In Lincoln, property investment offers an affordable, stable and consistent source of income than investing in stocks and shares.
But it also requires a more considerable initial capital outlay, ongoing costs and a longer-term commitment. Ultimately, the best option for you depends on your investment goals, risk appetite, budget, timescale and personal preference.
Whatever you choose, make sure you do your due diligence, seek professional advice if needed and invest wisely.
For more help and advice about investing in Lincoln’s property market, speak to us today on 01522 718611.
This article should not be seen as offering financial advice – always speak with a financial advisor before committing to any investment.
