Saturday 8 December 2007

UK Real Estate Invetment

There are several reasons why we believe investing in property is, has been, and always will be as good a place for your money as there is out there! Firstly, the worldwide housing market is limited in supply and the population is ever-increasing at an exponential rate. This is true with most local markets as well as demand for housing continues to outstrip supply, pushing prices up and causing cities to expand. Simple supply and demand tells us that as demand grows faster than supply, prices must rise! Of course, investing in the right market and at the right time are integral to your success in property investment. Not all markets are rising, or have good rental returns; but if you are able to find the ones that are, you will do very well in the world of property investment!

There is also a wealth of information on the internet and in books these days. Property investment knowledge is not something that is taught in schools or at university - most successful investors we work with and know are self taught.

Strategy is also all important whatever stage of investing you are at. You must define your goals clearly, and stick to looking for deals that can help you achieve those goals. For example, you must decide whether you are looking to build equity or a stream of cash flow. Some investors primarily invest in a holiday home for self use and others will buy scores of properties a month and not visit one! Some investors prefer to invest only in their local market, while others will buy in several high growth areas overseas. Other investors we work with prefer the hands-off approach and invest in funds and syndicates; there are many different possibilities out there. Whatever your goals, I strongly recommend taking the time to define these before starting to invest. One of our team will be happy to talk through your situation, and point you in the right direction.

Investors can expect two different types of return when investing in property; income and/or growth. If investing for growth or capital gains, investors generally take a longer term view rather than needing more immediate access to capital. During your investing days, your priorities may change depending on your salary and other sources of income. It is likely that you will require income from your investments more so later in life as you work less and less. Planning for income, growth, or a combination of the two, often stems from your tax position, your immediate requirements for cash, and your longer-term plans. Many people construct a property portfolio of investments which offer a combination of income now and future growth.