INVESTOR FINANCE
One of the things I love about property investment is that you get returns from two sources : 1 . Capital growth or appreciation ( the percentage with which the value of your property increases annually ), and
2 . Your Net Rental Yield ( the return you generate from your annual net rental income ).
Often , when analysts evaluate property as an asset class , they only focus on the capital appreciation or net rental yield . This is incorrect , as both returns should be combined to see the full returns that a property investment has generated .
There is , however , another significant advantage of property investment as an asset class … You can use leverage ! In other words , you can buy property using the bank ’ s or other people ’ s money .
Leverage can drastically change the returns generated from the investment since it amplifies the returns ( positive or negative ) that are already there . Leverage is probably one of the biggest reasons why property investors invest in property . They can build wealth and generate returns without using too much of their own money .