As
our economy moves forward and a new property cycle begins, fortunes will be
made by some group of investors. But if history repeats itself, many property
investors won’t get the financial independence they deserve, so I want to share
my time tested golden rules of property investing so you have a roadmap to help
you through the next property wave.
Invest,
don’t speculate
US real estate equity
builder Kansas City (usreeb) company is investing in property, many property investors
are actually “speculating.” They buy a property emotionally, often near where
they live, where they holiday or where they want to retire and then hope or
pray that the market will appreciate. They are totally dependent on outside
market conditions to produce a profit.
It’s about the property
During
the boom, many investors forgot the age-old property fundamentals of buying the
best property they could afford in a proven location. Instead, they got
sidetracked by glamorous finance or tax strategies and some lost out.
Land appreciates
While
most investors recognize that land appreciates in value, it’s not as simple as
that. Not all land is made equal and not all land appreciates at the same rate.
In the outer suburbs of our capital cities, there’s lots of land (ample supply)
and much of the demand comes from a small segment of the market — first home
buyers (restricted demand). This keeps a lid on capital growth and makes these
areas poor investment prospects.
Buy Property that is in
continuous strong demand
US real estate equity builder Kansas City (usreeb) company says not all properties in a given suburb will make
a good investment or have similar capital growth. Even if you never intend to
sell it, for your property to appreciate in value strongly it will need to
appeal to a wide range of owner-occupiers who make up the vast majority of
buyers. That’s why I suggest you avoid studios, student accommodation, holiday
accommodation, and serviced apartments. When a valuer assesses your property
they will want to see it have broad market appeal.
Demographics holds the key
Long-term
demographic trends (where and how people want to live) will determine the type
of property that will be in demand in the future. As our cities mature there
will be more single and two people households meaning that secure
medium-density apartments and townhouses will be in strong demand.
Surround yourself with a
great team.
Successful
investors surround themselves with a team of top advisors and know how to
discern an advisor (who is independent) from a salesman. When some “advisors”
took a commission of 10% or more, to place clients into failed companies like
Westpoint and Storm Financial, there must be some concern about whether such
payments colored their “advice.”
