Property Investment Success | Sophisticated Investor
Property investment offers considerable chances for success based on several factors. And while it is true that many people who have invested in properties have reaped considerable rewards, it is not always successful. There are very few overnight success stories as this is a field designed for the long term. And there is the ever-present factor of risk which means that even the best laid plans may not succeed.
So, before you dive into property investment, it pays to know what you are getting into. Especially if you have never invested in real estate before. And while there are considerable benefits and a level of security that is greater compared to stocks, there are also challenges as well.
Know Where You are at and What You Can Afford
Before you start purchasing real estate, you must understand your current financial position. You will need a minimum capacity in terms of cash to make the right purchases. Plus, even with the best-researched properties, there are no guarantees of success. This means that putting all your eggs in one basket may leave you without any eggs.
To help you assess which purchases are right for you, it is recommended that you seek out a qualified, experienced financial or investment agent. That way, you can know where you stand, what you can afford, and the general risk that is involved.
Identify the Properties that are Successful
Every community has different opportunities in terms of what works best. For example, single family homes are a popular option, but there may be better opportunities in commercial properties. This means doing the research to better understand what type of properties and investments will work best for your situation.
Start by looking at the demographics of the area, what capital growth has been achieved and what is to be expected, and the types of demands that are needed in the community as well. For single family homes, you’ll want to narrow the search for the best neighborhood, then the best street, then the best side of the street. The more research you do, the better informed your decision will be as to what investment property is the best.
Lending Options
If you have the cash on hand to make the purchase, then go ahead once you have completed the research. However, most people will need financial assistance to buy properties. This means finding either the right lender or partners to make the purchase.
Finding the right lender means you may be able to go on your own, but you will owe the money with interest. So, you will have to either sell or make a monthly income on the property right away. Finding partners means obtaining a smaller loan or perhaps no loan at all if you have the money. However, you will have to share the profits with your partners, so the return is less per property.
Remember that property investment success is built for the long term. Finding a reliable lender or partners will help you achieve the success you want and build an proper investment portfolio.
Expert Contributor:
Zanthe Alexander Bentley is a finance veteran with over 25 years’ wealth management experience advising both family offices and institutions on their corporate finance requirements including capital raises (debt & equity), restructurings and M&A activities. He has significant experience in investment management and investment banking and spent nine years at UBS focused on convertible bond arbitrage and equity derivatives.
Prior to getting involved in Asset Management he expanded a small Spanish brokerage from a handful of staff in Barcelona to a diversified brokerage company with over 150 personnel spread across 9 countries, transacting deals from High Grade to High Yield Fixed Income and Loans; Structured Products through to exchanged traded equities.
After taking time to focus on family office activities in Asia, Zanthe-Alexander now leads an ambitious zero-leveraged fund providing exceptional growth and income to Sophisticated Investors.
Originally published at https://sophisticated-investor.com on May 19, 2021.
