Why Invest In Real Estate?

While athletes are busy getting the VIP treatment, they are often concealed in a bubble that can sometimes seem disconnected from the real world. The reality of day-to-day, week-to-week, month-to-month budgeting is forgotten and replaced with the fast nature of a professional athlete’s lifestyle, which invariably results in over-spending.

While a number of athletes contribute to a tailored pension scheme, it is clear that they cannot depend on the governing body pension scheme to  sustain the same lifestyle they have become accustomed to. In some instances, athletes cannot gain access to their pension until age 55 at the earliest. Therefore, when we consider that most professional athletes finish playing at age 33, and that  an average of 3 out of 5 players go bankrupt within 10 years of retiring, it becomes clear that having an alternative to pension is critical. 

Planning for life after sport means exploring: 

  • Investing in new business ventures 
  • Investing in the stock market 
  • Investing in property

When we at LBRE look at various investment markets, investment in property has a strong reputation for delivering stability, alongside excellent rental and capital growth returns over the long term. The property sector, as a market, has also delivered significantly less price fluctuation compared to other asset classes. The stability of real estate means it is often the preferred asset class for building stable wealth.

01  Rental Yield

Property delivers steady and consistent yields and is often seen as a ‘safe haven’. Investors tend to purchase property with interest-only mortgages to create a surplus of rent, enabling the property to become an income producing asset.

02  Capital Growth
One of the most appealing things about investing in property is the potential for capital growth. Property prices have historically risen in stable markets over the medium to long term.
03  Diversification

Diversification should be at the heart of building any investment portfolio, however, property is often neglected by financial advisers. Property can deliver superior returns and lower volatility than the equity markets. Property can also be used to lower the risk of other investments when considering a combined portfolio.

04  Stability
All asset classes are affected by market volatility, but property is more resilient to external economic forces and often holds its underlying value better than other asset classes. This means that unlike other asset classes, property is much less exposed to short term volatility.
05  Tax Planning

Most property investments can be structured in a way that takes advantage of tax benefits that would not be available for other investment vehicles, further strengthening the ability to maximise the potential of your available capital. For example, we often advise clients on the benefits of investing in a company structure in order to maximise tax efficiency.