As with any investment, there are always advantages and disadvantages. 

The advantages include:

• There is likely to always be a demand for land and houses (they’re not making any more land) – which creates the potential to make a reasonable return on your investment over time.
• A home is a tangible asset, as opposed to some other forms of investment – you can sell it if you need to.
• There is a growing trend towards renting, so there is likely to be an increasing number of people looking for homes to rent.
• You may not need a lot of money to get started.  You may be able to use the equity in your own home as the deposit on a rental property.
• You may be able to claim expenses on your rental property, and you may save on tax.
• Property values tend to keep up with (or better) inflation.
• For small investors, having an investment property may act as a compulsory form of saving.

The disadvantages include:

• Being a landlord can be stressful and time-consuming – for example, there may be problems with tenants, such as damage to your property or non-payment of rent (however, you could employ a property management company to look after your property for you, for a fee – for more on this see our Managing Property section).
• The housing market is subject to fluctuations like any other market, so property investment generally requires a long-term approach.
• By investing in property you may end up having the majority of your personal wealth tied up in the property market, leaving yourself exposed if the housing market turns down. You may prefer to have a more diversified approach to your investments.
• You may need to cover any losses from the investment – for example, if you are without tenants and have no rent coming in for an extended period.
  
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This material is for information purposes only. You should seek professional advice related to your individual circumstances. While The National Bank has taken care to ensure that this information is from reliable sources, it cannot warrant its accuracy, completeness or suitability for your intended use. To the extent permitted by law, The National Bank does not accept any responsibility or liability arising from your use of this information. Our lending criteria, terms, conditions and fees apply.