Property investment has remained as one of the safest ways of building a retirement nest egg for the uncertain future. It is one of the most popular investments among the world’s richest investors. If you are just starting out in property investments then to succeed you have to emulate what the experts are doing. Follow these 9 golden rules of property investment and you shall succeed also;
- No 1 Invest in What you Understand
Most of the novice investors are put off when they hear the term property investment. They tend to view it as risky and ideal for the rich. There is a great difference between what is risky and risk. Every investment has some level of risk attached to it but that does not mean the investment is risky. If you do not understand what you are doing then you will be right to view property investment as risky. However, to the smart investor investing in property is never risky since they understand what they are doing.
The best way to minimize risk in any investment is to focus on what you understand first before considering moving to another venture.
- No 2 Pay the Correct Price
We all hear of the words “buy low, sell high” and this tends to mislead many investors. Instead of doing enough research they settle for what is within reach. This should never be a strategy employed by the smart investor. Those who understand property investment make use of market tools and analytics to monitor market trends and indication. That way they are able to compare various prices before buying commercial property, industrial property, new launch condo or resale condo. By making comparisons and finding out what others have paid for, these investors get a more accurate point of reference when presenting their offer. Always do your research so as to avoid overpaying.
- No 3 Forget the Crowd and Follow the Leader
When you observe market trends you realize that the majority of average investors normally rush to buy when the market is heating up. Instead of following the crowed, stand back and think again before diving in. The pros understand that the property market goes through cycles and are usually the first to jump in before everyone else. It is usually wise to buy when the market is at its lowest instead of when there is lots of hype.
It never pays to follow the crowd when it comes to property investment. Instead, follow the leader especially those who have a good reputation.
- No 4 Know your Financial Position
Before the hunt for property begins, you need to understand your financial position. It is always wise to ask for a pre-approval of your investment loan even before you get started. This will help you understand how much you can borrow. It is much better to know how much you can afford early enough so as to eliminate investments that are out of your reach.
- No 5 Do not Underestimate Costs
If you are buying property for the first time then you tend to only focus on the purchase price and ignore other costs such as general repairs, rates, insurance, stamp duty, and many others. Turning a blind eye on these unprecedented costs may impact you greatly once you buy your property. You should plan in advance for such costs and ensure you avoid costly maintenance issues that may arise as early as possible. A showflat for upcoming development is probably the best tool to bench mark the unprecedented costs. At the showflat, you will be able to know which are the non-provided items and you can start saving up for the relevant renovation when it’s completed down the road. It’s is also better to call the sales gallery to know the location as some showflats may not be located at exact site. Since we had just welcome year 2017, you may want to look at the showflat of both Clement Canopy and Grandeur Park Residences launching in 1st quarter 2017.
- No 6 Know your Numbers
You should always take your time to know the quantitative details of what you are getting into. Know your numbers before you commit to a deal. Always calculate and evaluate the financial impact the purchase of the property in question will have. Do not simply overlook the small details and follow your heart. Use your mind and numbers to evaluate a good deal. Try to understand the impact of various aspects such as; implication of stamp duty on your unit, depreciation claims effects, effects of selling fees on capital gains, and many others.
- No 7 Location is Key
Location really matters when it comes to property investment. It is always wise to evaluate the existing and potential infrastructure within an area when evaluating the viability of an investment area. Invest on property that has an easy access to freeways and public transport. Furthermore, carry out research to find out whether there are some upcoming developments or projects within the area. Views like are city view, sea view, pool view etc are “international popular” for both buyers and tenants. Therefore, a property with good location and above attributes will certainly command a higher price regardless of whether you are selling off or renting out. One such development to consider in 2017 is Seaside Residences which is sitting in Siglap Road and facing sea view. Another point to note that Seaside Residences price will be priced to sell despite having a good location and international popular’’ attributes covered above.
No 8 Keep your Money Moving
Smart investors commit to investments that give immediate returns today. Anything else is not a good investment. If you are buying an investment based on projected future returns then that means you are gambling with your money. If you desire to grow your wealth through property investment then avoid investments that do not pay today. You should always keep your money moving and for every property purchased, it should make financial sense from the date a purchase is made. You should never keep your money lying idle as you await future returns on investments that offer unguaranteed returns.
- No 9 Do not Consume your Capital
This is one of the simplest yet a very powerful rule of property investment. The amateur does not understand this rule and that is why they do not succeed in property investment. If you desire to succeed in property investment then you have to understand the difference between good and bad investments. The good investment not only earns you a return within the shortest time possible but it also ensures you get back your initial capital investment as soon as possible. Once you get your capital, do not consume it but rather keep it moving. Let it generate more money by reinvesting it.
To get the best of your property investments you should continuously invest in your knowledge, practice what you learn and follow the golden rules of property investment. Once you have disciplined yourself to stick to the rules, success will ultimately follow. Always remember to stick to investments that meet your set criteria and avoid the temptation to invest in those investments you know little or nothing about. Most importantly find a mentor or seek advice from those who have tried and succeeded in the kind of investments you have chosen.