The Savvy Property Investor’s Cheat Sheet
Property has long been thought of as a good investment. After all, even if the market collapses completely those that are the sole owners of property that are paid off will still have something to show for their money.
However, the ins and outs of property investment are complicated, and savvy investors do their research before signing in the dotted line, something that the post below can help you with.
Pick your market
Many folks only think of property investment in term of residential units that they are personally responsible for. However, there are many more markets out there that can be profitable in the long-term. These include commercial units, land, managed homes and vacation lets among others.
What this means is that it is important to crunch the numbers before you invest. This is because, depending on the amount you have, you could end up making more money in the non-residential sector.
Pool your resources
Before you jump into being personally responsible for a property, as described below, it’s also a good idea to see if pooling your money with other investors might be more profitable too.
To do this, it can be helpful to consult with companies like Origin Real Estate Crowdfunding that groups investors together and pools their money. They do this because it allows investors to purchase a stake in larger investments.
The advantage of using a form such as this is that you can get a piece of a bigger, and possible more commercially viable pie that you wouldn’t be able to access on your own. You also get the opportunity to diversify your portfolio across commercial and residential markets with the minimum of hassle. Something that can make your investment a lot safer in the long term.
Lease or flip
Next, if you have decided that you will buy a property outright, you need to determine whether the aim of this will be to lease it for a steady income or to flip it for a quick profit.
Leasing property, whether its commercial or residential can work well because it allows you to cover your finance payments and therefore give you access to a larger sum when you do choose to sell.
Also, if you can buy the property outright, then any monthly payments will be a regular passive income that you can collect. Something that when added to the profit you can make with a later sale shows this type of investment to be particularly profitable if the market is on your side.
The other option that is open to investors is to buy a property, renovate it, and then flip it. This is a method that has become popularised over the last few years by TV shows such as the one below.
It is a little riskier than the leasing option because you are reliant on the market being lower when you want to buy, and higher when you want to sell.
There are also a lot more stressful factors to consider like completing the renovations on time and budget, as well as finding the right buyer in the time window you are looking for. Although done right this option can also earn you a significant increase in your initial investment if the market is favourable.
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