INVESTING IN PROPERTY

Investing in property has proven over and over again to be the most lucrative and also the safest way to secure and grow your money. This is true for several reasons. The value of your property appreciates every year, giving you more equity and therefore more buying power. Finally, a consistent cash flow can be earned by having tenants, reducing your monthly payments and giving you extra cash to cover other expenses. Thousands of dollars increase in property value and cash flow gives you the freedom to invest more, exponentially increasing your wealth with each additional property!

Properties Investment Strategies

So what is your property investment strategy or strategies?

It is all very well saying it is easy to make money from property, but like anything you must know what you are doing. And as we are all different with different goals in life, we will all have different strategies when it comes to investing. Differing factors will include how much money you have initially to invest, what financial commitments you have, what age you are, whether you are looking to secure a pension, or give up work completely.

At the outset, the 3 main things you must ask yourself are:

How much risk are you willing to take?
What time scale are you working to?
How much time you will be able to give your property portfolio?

Let's consider some of the other factors that may affect your strategy:

Market cycles
Most people do realize they ought to invest and purchase a property - but do not always give real thought to market timing. This can be a major mistake. Like most investments, property markets can be cyclical - that is, although the value of property goes up consistently over the long term, it tends to go up and down along the way.

When looking for to invest, you must:

1. Consider the various locations suitable for investment and don't limit yourself,
2. Understand the market cycle and key investment factors of the various locations, i.e. an ideal location may have perhaps recently emerged from a downward recession and be poised for strong growth due to increased investment, job creation, and be aware of interest rates,
3. Within these key locations, determine which property types have low supply and high demand,
4. deal with only the most reputable companies when selecting individual properties, i.e. lawyers, agents, finders,
5. ensure you are paying a fair price. Always phone around a few estate agents in the area, before buying, say I am a prospective buyer in the area, and ask how much I should expect to pay for the type of property I am after. This can only take an hour but either confirms whether it is a good deal, or helps you walk away.

A diverse Property Strategy

Because a property markets in different locations are at different stages in the above cycle, the best place to invest now will likely be in a different location to the best place to invest in the future. But before you get in a panic about never knowing where to buy, what that means is, buying an investment property in one location that is poised for significant capital growth, and as that property grows in value, using the equity in that first property (either by re-mortgaging or selling) to purchase additional property - which would probably be in a different location. Over time, you can build a diverse property portfolio, which should protect you from local or even national cycle.