Property Investing: How the Successful Ones Are Doing It
Parmdeep Vadesha
January 26, 2009
Investing in property has become an unpredictable undertaking for some people due to the credit crunch and the signs of an impending slowdown in property prices. While some people are waiting it out at the sidelines, others are more courageous as they continue to hang on and observe whether the conditions will develop into a full-blown recession. But as gloomy as the outlook is, many property investors are keen on improving their situation and proceed with property investing with the goal of succeeding in it. So how do you operate in a market where only the fittest survives?
Earning profits from your investment properties is still possible no matter what circumstances the country is in. This has been proven by the many property investors who have taken considerable risks and have come out victorious. Aside from being sensibly leveraged, many of them have the spare cash to take advantage of bargain properties being offered for sale – and not have to worry about the need to release equity from another property.
So how do these investors do it?
One strategy that many of them seriously follow is to what is considered as basic rules. Many of them purchase only two- and three-bedroom houses and contract only tenants who are serious with renting and are keen on staying longer than most others. There are also others who always purchase properties not located far from where they are residing and at prices that do not exceed a previously-set budget. They also make it a point to stay in the lowest group of stamp duty.
Another strategy they have is buying properties below market value. As one developer put it, you must purchase a property for 20% less than the market worth to ensure profits. In addition, you have to learn how to find quick sellers, people who need to go abroad, and repossessions. When hunting for a house, be sure to look in up-and-coming areas and choose a property you can add value to.
Estate agents, landlords and property experts are of the same opinion that opportunities still abound for those who are into property investing – as long as you do not have the objectives of someone who wants success overnight. The key to succeeding in this sector is to keep your concentration on getting good tenants and achieving rental growth.
Despite the credit crunch and stabilising prices, the sector remains a profitable one because property professionals expect a significant demand for rental properties. The demand is predicted to rise by 20,000 to 30,000 a year over the next ten years. The need will arise from the increasing number of divorces, rising immigration and growing job mobility. Furthermore, potential first-time homebuyers priced out of the market and those other people who need rental accommodations will all resort to renting.
For property investing to succeed, it is recommended that investors observe the guidelines laid down by local professionals about the property in the area, how it is furnished and take the realistic market rent into serious consideration.
Earning profits from your investment properties is still possible no matter what circumstances the country is in. This has been proven by the many property investors who have taken considerable risks and have come out victorious. Aside from being sensibly leveraged, many of them have the spare cash to take advantage of bargain properties being offered for sale – and not have to worry about the need to release equity from another property.
So how do these investors do it?
One strategy that many of them seriously follow is to what is considered as basic rules. Many of them purchase only two- and three-bedroom houses and contract only tenants who are serious with renting and are keen on staying longer than most others. There are also others who always purchase properties not located far from where they are residing and at prices that do not exceed a previously-set budget. They also make it a point to stay in the lowest group of stamp duty.
Another strategy they have is buying properties below market value. As one developer put it, you must purchase a property for 20% less than the market worth to ensure profits. In addition, you have to learn how to find quick sellers, people who need to go abroad, and repossessions. When hunting for a house, be sure to look in up-and-coming areas and choose a property you can add value to.
Estate agents, landlords and property experts are of the same opinion that opportunities still abound for those who are into property investing – as long as you do not have the objectives of someone who wants success overnight. The key to succeeding in this sector is to keep your concentration on getting good tenants and achieving rental growth.
Despite the credit crunch and stabilising prices, the sector remains a profitable one because property professionals expect a significant demand for rental properties. The demand is predicted to rise by 20,000 to 30,000 a year over the next ten years. The need will arise from the increasing number of divorces, rising immigration and growing job mobility. Furthermore, potential first-time homebuyers priced out of the market and those other people who need rental accommodations will all resort to renting.
For property investing to succeed, it is recommended that investors observe the guidelines laid down by local professionals about the property in the area, how it is furnished and take the realistic market rent into serious consideration.