Property Investment and You
As a property investor myself, this topic is one that is close to home.
If you are interested in becoming a property investor and have never bought an investment property before you will fit into one of two categories:
- You have never bought any property before
- You have bought a home before, but never an investment property
If you have bought one or more investment properties, you can download our free Property Investors Report for some additional tips.
Whichever category you fit into, you need to understand one thing first – what you want to achieve from regular property investment
What makes a good investor?
Regardless of what vehicle you choose to take with investment, a good investor knows how much they can afford to spend and what level of risk they can take on and what that investments potential value is.
It’s important to have a medium to long term plan and an investment strategy in place.
What types of property investors are there?
- Buy and hold
Buy and Hold investors generally buy a property and wait for it to appreciate in value over a period of time – usually 5-10 years. These investors will look to leverage the increased value to either buy more property, or sell in the long term to pay off existing debt. Selling occurs in the medium-long term.
- Renovations or “Flipping”
These investors look to buy a lower valued property that requires work to be done on it (either cosmetic, or major) – with the intent to renovate for an shorter term increase in value. Selling occurs in the short term.
- Developers
Developers look to “create” or “build” property with the intent to sell for a gain. Generally considered the highest risk type of investment, this method is performed by the experienced. Developing has the highest potential for short term gain, but as mentioned – can be risky. Selling occurs in the short-medium term.
Each investor at some point or another will need to structure their lending with a bank / lender (unless of course you have unlimited money – in which case why are you bothering with investing at all?). Whichever type of property investor you strive to be, you need to know your financial situation, borrowing requirements and have some strategies in place for understanding where you are – and how you are going to get to where you want to be.
