4 Principles of Property Investment

20 Dec

4 Principles of Property Investment

Property investment can seem intimidating, especially if you’re just starting out. You want to make the best of it but there’s a lot to consider and a long journey ahead.

So, here are 4 principles, that will help you to move forward and develop in the world of property investment.

Buy at a discount

This may seem obvious, but it’s important to consider value for money, in terms of how much capital you plan to invest in a property. Securing a property at a discount helps to insulate it against short-term downturns in the market.

Buying off-plan, when you purchase a property before its completion, is a great way of buying at a discount. Off-plan investments are competitively priced and give investors opportunities in new areas and exciting developments.

Think Long-Term

Don’t lose sight of your goals, or what you want from your property investment. Although, property can sometimes be unpredictable in the short-term, long-term investments result in more favourable and fruitful outcomes. Investing long-term allows your assets the time they need to reach their full potential and builds wealth along the way. Whereas continuously buying to sell can reduce your asset base and long-term wealth.

Buy for yield, not appreciation

It’s a myth that property prices always rise, like any other, the property market is not immune to short-term downturns. Ensure that you’ve done the sums, and that you can see your investment property making decent returns at its current value. Base your investment on its instant profitability, and rental income, not just growth.

Invest in what you know

Make sure you know the area of, the market for, and the type of property you want to invest in. Take advantage of what you’ve known to be successful or can see being successful. If HMOs, off-plan properties, managed properties, student accommodation etc have proved lucrative, then stick to them. That’s not to say, don’t take risks or look to take on different assets; if you do wish to do so though, ensure you carry out enough research.

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