Property Investing 101

Property investing is a highly profitable option to build capital and improve your financial well being. 

It does require preparation and planning, besides a sharp awareness about the property market, and the most advisable investing strategies.

Properties purchased as part of a buy and hold plan, help to bring two-fold returns, firstly as regular income supplements in the form of rent, and secondly long term appreciation, which sees the property value double in 7-8 years in countries like New Zealand.

The fundamental principle for profitable property investing is buying low and selling high. This is possible by keeping in close contact with property market developments and taking advantage of opportunities like distress sales, or panic sales and buying run-down properties, renovating them and selling for a much higher price.

Things to look at before investing in property

  • Location and locality– The location of the property has to be just right on the city map, and the locality must be conducive for happy and safe living. A good location need not be in the heart of the city to see values going up, it could be in a neat suburb as well. Localities are made by the people living there. Like minded people with good habits, not prone to wild behavior or antisocial activities make the locality conducive to family living. Such properties will always have a higher demand and better chances of getting sold.
  • Road links and transport– Property prices appreciate partly due to the accessibility factor. Well linked and connected places, with good local transport facilities do better in terms of appreciation, than others. A close look at this will help in making the right property investing decision.
  •  Amenities and facilities- Property purchases have to be made keeping in mind the convenience factor in terms of schools, amenities like health care, markets and play areas. They count because living in such places makes it convenient and easier for families, and such areas will be more sought after.

Benefits of investing in property

  • Leads to long term capital appreciation- Properties bought for investment purposes are generally kept for a period of time before being sold. Since they have been purchased after a due diligence conducted for all the positive features needed, they are bound to bring long term capital growth and can multiply at least two fold in 7-8 years.
  • Income supplements- Property investing requires funds for mortgage payments etc, but when it is bought with a long term perspective, it is natural to rent it out. The rental income supplements the current income and facilitates payment of mortgages and other maintenance dues.
  • Tax benefits- When mortgage payments have to be made, the income levels fall and this provide multiple tax benefits to property investors.
  • Improves financial health- Property investing may involve a bit of stretching oneself to take on a substantial mortgage to be repaid, but in the long run, it brings high returns and makes the financial base more secure, thus improving the economic well being of the investor.

Property investing is a wise step that has more benefits and no flip side to it, provided it is undertaken seriously and cautiously.

Tags: , ,

About PropertyTutors

“PropertyTutors Limited believes the information in this publication is correct, and it has reasonable grounds for any opinion or recommendation found within this publication on the date of this publication. However, no liability is accepted for any loss or damage incurred by any person as a result of any error in any information, opinion or recommendation in this publication. Nothing in this publication is, or should be taken as, an offer, invitation or recommendation to buy, sell or retain any investment in or make any deposit with any person. The information contained in this publication is general in nature. It may not be relevant to individual circumstances. Before making any investment, insurance or other financial decisions, you should consult a professional financial adviser. This publication is for the use of persons in New Zealand only. Copyright in this publication is owned by PropertyTutors Limited. You must not reproduce or distribute content from this publication or any part of it without prior permission.”