Peter Scully submits: The property market is definitely not a short-term investment, and attempts to treat it as such are doomed to failure. However, it can be a rewarding and lucrative investment in the longer term. Following a few key tips can help to safeguard the profitability of your investment over time.

Study the Market

It is vital that you enter the property market prepared. This is particularly true for those who are new to property investment, and this is the group that most commonly makes mistakes of this kind. However, it also applies to those purchasing new properties to add to an existing portfolio. All investment involves risk, and buying an investment without proper preparation – particularly in a competitive market like property – could see you losing money when you could have been making it.

Study the market before plunging into it, and find out what price trends have recently been taking place. Keep an eye on property sales online to see where demand is and which locations and types of property are being snapped up. Find out about your finance options, the size of deposit you will need, and the rates you will be subject to. This will help you build up a complete picture and make an informed decision about your purchase.

Know Your Goals

It is important to have a plan from the outset rather than just buying a property and attempting to wing it. Know what your main revenue stream is: capital growth or rental returns. While many investors will want to take advantage of both to at least some degree, knowing which is your main concern could significantly affect the way you should best handle your investment. Are you buying primarily as a buy-to-let, or is it your intention to take advantage of an anticipated price rise then profit on resale? This is most pertinent when it comes to mortgages that offer a fixed rate for a certain number of years, as it dictates whether you are likely to still have the property when rates could rise.

It is also important to know exactly what type of tenant you want to attract for a rental property. Rather than trying to make your property all things to all people, it is best to choose a niche and stick with it. Identify a group of prominent renters in your chosen area – such as young professionals or small families – then buy the kind of property they want and advertise it in the places they are likely to look.

Know the Risks

As with any investment strategy, it is important to make sure that you know and properly appreciate the risks before you invest. Property has something of a reputation as a secure, stable investment but it is definitely a mistake to think this means there is no risk at all.

Prices could fall and leave your property worth less than you paid for it. Even if all the experts are predicting they will rise, this is not a 100% guarantee. You could find that your property sits empty for some time due to lower-than-anticipated demand, or that demand has fallen by the time you planned to resell. The above steps can do a lot to minimise these risks, but you must appreciate that they will always be present to some degree.

Author Bio

The Overseas Investor are international property investment specialists with a wide range of investment opportunities around the world including the US, The Caribbean, The UAE and the UK Student investment property market.

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Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisor

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