Which Investment Property Is Right for You?

When you first entertained the concept of investing in a property, you probably didn’t imagine there would be so many choices to make and factors to consider. From arranging an investment loan to researching locations, making sure you invest wisely is a challenge, but it is one that often pays off – and pays off well – when done properly.

One of the most important decisions you’re facing is choosing the actual property. Your final selection will play a part in the success of your investment, influence the kind of tenants you rent to, and could even determine where you live in the future. This isn’t something to be taken lightly. Here are three key questions to pose to yourself when tossing up your options.

What Can You Afford?

Image Courtesy of Stuart Miles at FreeDigitalPhotos.net

Image Courtesy of Stuart Miles at FreeDigitalPhotos.net

Yes, unless you’ve just won the lottery or have been saving for an incredibly long time for this, you’ll be using a loan to purchase your investment property. But, whether you get your investment loan from a well-established organisation like BOQ or a lesser-known lending company from your neighbourhood, this loan doesn’t give you free rein over the properties that are viable for you to invest in.

How much of your savings can you dedicate to a deposit? How many years do you really want this large debt hanging over your head? Consider your current circumstances and try to envision the future of your finances while determining the price bracket your ideal investment property would fit in to.

Where Is It Located?

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Many investors like to choose properties in their own city. This does present the benefit of allowing you to keep an eye on how things are going, plus you’ll have local knowledge of the area to help you make an informed decision. On the other hand, close proximity to your investment property could feel stifling or even restrictive. A benefit of investing elsewhere is that you’ve opened up an opportunity to easily move to a new place should doing so become desirable or convenient.

Other locations may also prove more lucrative than your own neighbourhood, depending on the relevant market trends and the demand for accommodation in the area. For example, a town with an older average population might not present a great deal of potential leasers, while a city with several universities is likely to see fierce competition for rental properties. Plus, with a credible property manager, you should be able to relax with the knowledge that your investment is in good hands, even if you can’t check in yourself.

What Kind of Tenants Would You Like?

Jeroen van Oostrom at FreeDigitalPhotos.net

Jeroen van Oostrom at FreeDigitalPhotos.net

The answer to this is obviously the most reliable and trustworthy tenants that apply, right? Well, to ensure that you’re attracting the ideal tenants to your property, it’s important to choose a place that comes with the features that these people will find appealing. Sure, some of these features – such as security and landscaping – can be added after the purchase. Others, however, can be more difficult or even impossible to provide in hindsight, and these could include a nice view, ample storage space, and parking spaces. If you want the best possible people accommodating your property, you need it to be the best possible property.

Also consider the specific type of people you’d be most comfortable entrusting your property’s wellbeing to. If you’re a family-oriented individual and would like to give another family a home, consider a house in the suburbs. If you feel a young professional would be the ideal candidate, lean towards an inner-city apartment.

Unsurprisingly, the right investment property for you ultimately comes down to you. The types of property you like, the types of people you trust, and your own financial circumstances – these personal factors and others will likely be reflected by your final choice. Carefully considering the questions raised above should lead you towards making the right decision.

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Five Things to Do Before Investing in Property

Investing in property can be quite an exciting time if you’re ready for it. The process does not have to be too difficult if you’ve done all of your homework. Investing can significantly enhance your finance portfolio, andthe best investors are those who understand the market and where they can fit into it. Here are a few tips to think about before you get started.

investing in property

1. Do Your Homework

Know what to invest in and what the current market is like. Take everything into consideration,including location, type of property, and value. By doing your homework and understanding as much about the market and your needs as possible, you will save yourself time and energy in the long run. Consider the pros and cons of every option that is available to you. Who are you looking to rent to? What types of amenities will they be interested in? Knowing the answers before you begin your investment journey is an important first step.

2. Study Your Finances

investment property
Investing in a property is a long-term commitment that might not provide any returns for quite some time. Look at your finances and consider your options. Maintaining and servicing a loan on an investment property could be relatively inexpensive because you are receiving rental payments. But, even so, you want to make sure you are financially stable in your accounts so that you do not have to sell your rental property before you are ready. Develop a budget so that you can effectively balance your income with your expenses.

3. Do a Property Check

Many companies offer property checks prior to any investment. These checks can provide information on a particular parcel of land, such as land titles, contaminated land, and current ownerships to name a few. Companies like GlobalX offer property checks that are useful if you are considering purchasing a plot of land or if you are researching a property to purchase in a particular area.

4. Create a Plan

Creating a plan includes both financial knowledge and market knowledge. Sit down and map out both long-term and short-term strategies so you will be ready to take the investment leap. Investing in property must be a long-term commitment, so make sure you can afford to commit to a property for quite a while. Set up a plan that includes a benchmark financial position, market research, and personal preferences. Decide what goals you want to achieve by investing in a property and develop steps in your plan that will help you reach them.

5. Be Ready

investing in property

Once you have created your plan, done your research, and achieved financial stability,look at other aspects of your life and decide whether you are able to take on the responsibility of an investment property and all that it entails. While being a landlord to tenants might be a hands-off role, owning and maintaining a property is still a full-time consideration.

What lessons have you learned while preparing to invest in property? Have any tips you could share with other prospective property investors? Leave your comments below.

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Pixabay.com

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Investing in Gold and Silver: Hedging Against Economic Forces

The economy can move in different ways, leaving investors eating dust on bad investment choices or cashing in on gains worth way over what they have invested. This is the reason why diversification is recommended. The wise investor would be prepared enough to balance his earnings and losses even during adverse market movements. Investing in gold and silver is a good way to diversify your investments.
gold and silver
Both gold and silver are precious metals that are mined and used for various purposes. In the past, both metals were also used in the production of currency. Today, these are no longer used in currencies, but they remain to be highly valued. Investments in these precious metals are often valued by committees in various exchanges all over the world. These committees are composed of members from the most recognized financial institutions in the region that the exchange covers. Among these are investments in gold and silver as commodities, stocks of mining companies, and derivatives and futures. These might sound complicated to those who are just starting out. A quick research on what these investment instruments are will give you the basics so you can understand how investing in gold and silver instruments can work to your advantage.

The basic benefit of investing in gold and silver is that their value is often not dependent on the economic conditions in particular companies. They are valued separately using the law of demand and supply. The higher the demand for these metals, the higher their prices are in the market. The same movement in prices can be expected when the supply of the metals is low. Indirectly, the strength or a weakness of currencies can influence the demand for gold or silver.

In times when the currency values are quite shaky, for example, the natural tendency of investors would be to resort to investing in gold and silver as a way to preserve their capital. The shift to investments in precious metals serves as their hedge against potential inflationary forces or any other changes that could shake the economy and affect conventional investments. However, going out and buying gold and silver is not as easy as it seems no matter what the economic conditions are. Just like any other investment instrument, the investor should be wise enough to consult historical charts to determine when the best time to invest in precious metals.

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5 Investment Strategies to Avoid in 2014

Investing in nothing at all has few advantages; it certainly can’t help you get ahead financially. However, one of the reasons people put off investing is the fear of losing money. This fear is logical and very sensible – you work hard for your money so you should think carefully before committing to an investment strategy which you feel to be high risk, but how do you tell? Doing something with your money is far better than doing nothing – but how do you choose the right something? Some investment strategies to avoid are listed below.

investment

You work hard for your money so you should think carefully before committing to an investment strategy.

The Sure Thing

Whenever you hear you can’t lose, or it’s completely risk-free regarding an investment, listen for the alarm bells too. You hear the same sort of claims at the race track. Any investment that claims to be a sure thing is, at best, misrepresented and at worst, a scam. No investment returns consistently high yields every year. If the investment doesn’t show any poor returns at all then the sales information may be questionable.

Ostrich Farms

Believe it or not, these are still offered as legitimate investments. The promised returns (in some cases over 200%) are highly suspect. Like any pastoral enterprise, there are risks associated with this type of investment. While ostriches are known to be hardy and long-lived birds they are also prone to pests and disease, just like cows or chickens, and the farms are just as vulnerable to drought and weather damage as any other. Unlike most other farming enterprises however, there is little demand for the product and this, couples with the capital-intensive nature of the investment means the promised returns are unlikely to materialise.

Movies

Investments in film sound glamorous but – contrary to popular Hollywood myth – movies rarely make money. While it has never been cheaper to shoot a film than it is now, the costs of distribution and promotion remain high – and the support of critics and/or the public remains capricious.

Art

Like film investments above, the value of art is highly subjective. Investors who choose art as a wealth creation vehicle are taking a big risk. Should fame in any large measure elude their artist of choice, the money spent on their work will likely never be recouped. If the painter were to die, their work could well increase in value but there is no guarantee of this, or that another investor won’t sell their collection at the same time, thereby flooding the market and reducing returns for everyone concerned. The associated costs of investing in such a high-risk enterprise (storage, insurance, etc.) are also high and will impact any potential return.

Timeshares

Timeshares may be a great way to holiday cheaply but as an investment there is no resale value. They are also quite time intensive. To get the best out of this sort of investment, you will likely be doing a lot of trades. These investments offer no capital growth – you’re unlikely to sell for more than you bought, and it doesn’t deliver any sort of income. It may save you money, as you can holiday less expensively but that’s about all it gives you.

Learning to tell the difference between a sound investment strategy and those you ought to avoid is all about developing your own financial intelligence. For more ways to enhance your knowledge of sound investment strategies, financial planning companies like My Wealth Solutions offer informative blogs. With the right guidance you’ll jettison fear and make the smart money decisions.

What’s the riskiest investment strategy you’ve ever heard? Share your comments below.

The information provided in this article has been provided as general advice only. We have not considered your financial circumstances, needs or objectives and you should seek the assistance of your GPS Wealth Limited (GPS) Adviser before you make any decision regarding any products mentioned in this communication. Whilst all care has been taken in the preparation of this material, no warranty is given in respect of the information provided and accordingly neither GPS nor its related entities, employees or agents shall be liable on any ground whatsoever with respect to decisions or actions taken as a result of you acting upon such information.

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Where in the World is the Best Place to Invest in Real Estate

Every investor knows that real estate properties hold a lot of promise. This type of investment is often intended for long term gains. It is also a fact that the real estate industry can rise and fall too. There are a lot of factors that go into the valuation of and demand for real estate properties. A lot of it is dependent on the country’s economy. Some people would then ask for advice on the best place to invest in real estate. The answer is not quite simple and requires a bit of research. Information about the past and the present developments in any country’s real estate sector is necessary. Future forecasts are also important in deciding where to invest.

Dubai

In Dubai, for example, the prognosis for the real estate sector is optimistic. Many people consider it as the best place to invest in real estate today. Construction projects and community development are currently on the rise to meet demand. This country is enjoying a lot of attention in the economic community as it is seen to be one of the best places for both leisure and business travels. A lot of foreign investors are coming in to fund projects in various industries. The tourist attractions are also being discovered by more and more people. It is fast becoming a thriving melting pot of cultures, spurring business growth and development.

This country is the best place to invest in real estate for people who are looking for investments that will bring them a steady stream of income over a number of years. While the prices of real estate property are rising, these are expected to return high yields in terms of regular income. Hotel apartments and transient residences are particularly popular as the number of people visiting Dubai for business and leisure is expected to continue to rise in the coming years. Rental income will undoubtedly rise with the demand for temporary residences for people staying from a couple of days to perhaps several months.

It is worthwhile to explore investment opportunities in the Dubai real estate market both for business investors and individual investors. Ultimately, however, the choice of the best place to invest in real estate would boil down to what the investor can afford and successfully manage from wherever else in the world he is.

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commons.wikimedia.org

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