Investing in property, Be it residential, agricultural, commercial, leisure, health care, student accommodation or another niche property sector, is apparently the most popular and common type of alternative investment, and has been used as a low risk, long-term investment advantage by many Investors. The major goal of the property investor would be to capture income from leases, and/or capital growth either through natural attrition or by incorporating capital value through growth. No matter the shape or business, property investments are strong, tangible and a real’ in a property is not likely to depreciate in the long term given due care and attention is given to due diligence in the acquisition phase.
Investment Strategy
The traditional form of property investment is the easy leveraged buy to let, where an investor will acquire a home using a mixture of money and mortgage debt, and want to cover the mortgage costs with rental income. This strategy is excellent for the long-term Investor with ample time to enable the rentals to completely pay off any mortgage debt.
Elderly Investors should be wary of taking on long term debt to finance property acquisitions. The buy to let strategy could be applied to residential, agricultural, commercial and other industries including student accommodation and health care properties.
A more opportunistic Approach would be to identify and acquire distressed assets at hefty discounts, and aim to market quickly from the open market to be able to capture the inherent gain. This strategy eliminates the long-term financial liability related to land ownership, and also removes reliance on capital growth as the principal driver for profit.
Land development and Planning are also legitimate property investment plans, although these are usually large and complex projects and not acceptable for inexperienced Investors. 1 means for smaller Investors to take part in property development is to purchase off-plan, where they get a discount for agreeing to buy the property before it is built, this again catch inherent gain, and the investor might decide to sell the property on completion of the building works, or they might decide to rent out the property. Other alternatives for Investors looking for exposure to growth property are smaller improvements or refurbishments between the renovations of property to be able to add value.
