Buy a business do not buy residential property

15/09/2007 by info.

Increasingly statistics are showing that house prices are starting to fall as demand falls due to increasing interest rates and credit tightening by mortgage companies. There is also a direct link to the earnings of the population as a whole and the value of residential property, a relationship which is currently imbalanced. www.Housepricecrash.co.uk

The value of residential property will fall in the short term however the value of businesses are not falling.

The value of a business is based upon the ongoing profits of that business and this value has not changed in the last decade at between 1 and 2.5 times profits.

True some businesses may have reduced profits during this time, but there are plenty that are doing very well.

Even if the business is located within commercial freehold premises the value of these premises will not fall if residential property prices fall. Why? Because the value of the premises in the area are often linked to long term rental agreements. So the return on investment for investors is set for the forseeable future.

So if you have spare money to invest, perhaps now is the time to invest in businesses and commercial property investments rather than residential property.

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