The ever changing world markets are putting a large amount of strain on investments. Property lawyers would always advise that land and property is the best investment that can be made. Many of us look for houses for sale as a thing to invest in.
Buyers look for a first home mortgage with the view that these investments will mature and keep their money safe. Most trust lawyers will agree that having properties in your portfolio has always been good advice for those that want to have a long term investment that will produce a good yield.
However, house prices are not rising as fast as they once did. World trading markets have slowed which means that the property market as a whole, is often put in a question to see whether we should invest in it at all. The procedure of buying a property can be quite complicated, with things like a pre-purchase building inspection which is required before you proceed and it also helps to reinforce the notion that property markets are something to avoid in general.
What to avoid
- Short term investments
Short term investments and quick fix get rich quick schemes are not something you should get involved in as property, in this day and age, is a long term investment. That said, very popular areas can still have some buoyancy in the market but there is no guarantee on a return on a short investment.
- Property type
The type of property that you pick also determines whether it is a quality investment or not. Larger properties don’t sell as easily as smaller ones. Although large amounts of profit can be made on a larger property, this is something that you shy away from as the amount that can be lost is a lot more than it would be on a smaller property.
- Student areas
Try to avoid student areas as this type of market will be saturated with student rentals. The rental market can be quite lucrative if you are thinking of a buy to let property for instance, and a student area may be suitable in this case. However, if its a main residence for yourself that you are after, you want to avoid areas overpopulated with students.
- Financial advice
Talking to a financial advisor about the best way to get a good deal from a rental is a good place to start as rental properties are not as they may seem. For example, the layout of a property could be the difference between getting a good rental income and a bad rental income.
- Rural areas
The rural property market can go either way, like with other aspects of the property market. However, as many cities are now developing more environmentally friendly infrastructure, investing in rural areas may not be advisable as more money is being pumped into inner cities as opposed to rural areas.
You may find that modern advances take a while to filter through to rural areas. Areas of natural beauty are still worth investment, but you have to make sure that you are getting a good deal in the first place and you are not just relying on the look of the rural location.
Things to invest in:
- High end/luxury
High end and luxury properties are in demand because they often offer the latest in technology and are very environmentally friendly. This is a huge selling point and is very popular amongst buyers. Investing in this market can prove to be very beneficial because the property prices will remain stable and could in fact increase.
Flats or serviced apartments are popular in inner cities and the demand for high spec properties has never been more sought after. Some modern apartments even have electric charging points underneath of the buildings which give this form of living loads of positives and very few negatives.
- Renovation projects
If you can buy a property cheaply enough and you have good planning and preparation skills, you may find it beneficial to renovate a property relatively cheaply and be able to sell it at the maximum price. Again, as above, the location and what you buy are very important so that you don’t have a poor investment, but if you buy well, this is one area that is recommended for those that want to make money on their investment.
Renovations can be done on a grand scale but this is risky as you are investing more money into the property. However, if it’s done well, investing more could in fact be beneficial. However, the safest renovation projects are those that can be undertaken by you as an individual, which means you are only buying materials. Alternatively, if you know someone that can help you to keep the costs down, this will make your renovation project a success.
- Buy land and build
The final property market to mention is probably the riskiest, but if done well it can be one of the best options. Buying a patch of land and designing and building your own property will give you the property of your dreams. The negative to this is that you may find yourself having a property that you like but doesn’t appeal to anyone else.
If, however, you build a property that suits the masses, you could save a lot of money on the build and make money on the sale which will be regarded as a very good investment. Investing in self build properties is only advisable if you are extremely good at planning, good at sticking to a budget and have some experience in property building previously, as the risk of it going wrong is great so minimising that risk is crucial.
It’s clear to see that there are a number of ways to pick the right investment for you and avoid negative property markets this year.