Property Investment – Understanding the Market is the First Step

Property investing advice helps all those who are taking the first step towards adding a real estate asset to their portfolio.

As the only tangible asset whose value never falls to zero or negative amounts, it is wise to invest in property whenever it is possible to collect the minimum requisite amount.

Though property investing seems simple, there are a number of steps and procedures involved and understanding the property market well is the essential first step.

Some property investing advice provided by experts in the field would be beneficial to all prospective investors, both old and new.

Investing Basics 

  • Make well informed decisions by learning about the property market- Knowledge holds the key to wise decision making. It helps to make the right choices and rational decisions. Hence reading up on the property market, undergoing some training, even engaging a tutor, are ways of accomplishing this.
  • Make a detailed plan about investment goals- Both short term and long term goals must be clear in the mind so that the route to achieving them can be decided.
  • Know the risks before speculating and appreciation chance before investing- property can be bought for purely speculative purposes, to sell when the prices rise. But this can be risky since property also can prove to be in the same high risk-high return mould of other financial instruments. It is important to know the risks involved before investing. Similarly while investing in property as a safe asset, it becomes significant to understand the anticipated chances of appreciation, so that it yields some returns over time.
  • Positive cash flow properties make sense – While property experts believe that negative gearing with its tax benefits is a better route to investing in property, it is actually positive cash flow properties that are a safer bet since the net inflow is more than the outflow and there is no need to look for ways to meet any shortfall.
  • Buy properties at discounts rather than premiums- While stocks can be purchased for a premium, the best way to invest in property is to buy at a discount. This helps in reaping higher returns. Premium properties are already closer to their peak rates with little scope for further appreciation.
  • Trust your own judgment more than hearsay and written material- Everything that floats around as information updates about property may not always be true. So believe your own judgment that must be reached after verifying a piece of information from multiple sources.
  • Location is of utmost importance- Out of the numerous parameters that have to be checked before investing, location is the top priority, since that defines the price and appreciation potential.
  • Flexibility – Mortgage plans that are flexible more often provide the option of advance payments and can lead to saving in case of interest drops.

  Endless amounts of advice (more thought of as ‘viewpoints’), can be given to the property investor,  and with the right knowledge base, the right decision will be made for property investment.

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