Nicholas Wallwork
Editor-in-Chief
Staff member
Premium Member
In a world where everybody wants instant results it is perhaps no surprise that many real estate investors will discount run down properties in favour of the finished article. It is understandable, is in many ways the easy option and in reality you have a property which you can immediately put back onto the market. However, if you take a step back and look at the real estate market of today, is the best looking property always the best investment?
Room for improvement
If you are buying a business would you buy one which was the “finished article” which you could do very little to improve? You may be able to continue along the lucrative vein in which it currently operates but where is the kicker? Where is the opportunity for you to put your stamp on a business and create additional investment returns?
In reality the same is true when looking to buy a property because in many ways the opportunity to put your stamp on an investment allows you to add additional value. We have all seen those property programs where investors buy derelict buildings, completely renovate them and flip them for massive returns. Is this reality?
Building a long-term portfolio
If the opportunity arises where you can buy a property which is in the right place but needs significant work, surely this is a long-term investment? In the longer term you will benefit from the general market trend while there is potential to significantly increase the value by renovating the property. All you need is a detailed renovation plan, finances available to work at your own pace and the ability to stick to a budget. If you choose the right type of property, the right area and are able to negotiate an attractive price, then potentially you can build a high quality real estate portfolio for the future.
Too many people allow short term events to cloud their long-term judgement when in reality you should have your eye on the longer term and take advantage of potential short-term opportunities should they arise.
Leave some for the next investor
Lord Rothschild was an extremely successful investor who “always sold too soon” and left something for the next investor. This may seem a little bizarre but if you think about it, by “leaving something for the next investor” he made his investments attractive giving him a greater opportunity to sell them. There is also the small issue of market trends because if you try to hang on until the market “tops out” you will likely miss out through greed and struggle to sell on the way down, as other sellers hit the market.
Fear and greed are two emotions which dominate the investment markets, whether stocks and shares, real estate or anything else. If you can control your emotions, look at cold hard facts and take into account your gut feeling on individual investments, as well as investment markets, there is the potential to make a good living. Chasing overvalued properties and selling undervalued real estate is a fool’s game in the long term.
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Room for improvement
If you are buying a business would you buy one which was the “finished article” which you could do very little to improve? You may be able to continue along the lucrative vein in which it currently operates but where is the kicker? Where is the opportunity for you to put your stamp on a business and create additional investment returns?
In reality the same is true when looking to buy a property because in many ways the opportunity to put your stamp on an investment allows you to add additional value. We have all seen those property programs where investors buy derelict buildings, completely renovate them and flip them for massive returns. Is this reality?
Building a long-term portfolio
If the opportunity arises where you can buy a property which is in the right place but needs significant work, surely this is a long-term investment? In the longer term you will benefit from the general market trend while there is potential to significantly increase the value by renovating the property. All you need is a detailed renovation plan, finances available to work at your own pace and the ability to stick to a budget. If you choose the right type of property, the right area and are able to negotiate an attractive price, then potentially you can build a high quality real estate portfolio for the future.
Too many people allow short term events to cloud their long-term judgement when in reality you should have your eye on the longer term and take advantage of potential short-term opportunities should they arise.
Leave some for the next investor
Lord Rothschild was an extremely successful investor who “always sold too soon” and left something for the next investor. This may seem a little bizarre but if you think about it, by “leaving something for the next investor” he made his investments attractive giving him a greater opportunity to sell them. There is also the small issue of market trends because if you try to hang on until the market “tops out” you will likely miss out through greed and struggle to sell on the way down, as other sellers hit the market.
Fear and greed are two emotions which dominate the investment markets, whether stocks and shares, real estate or anything else. If you can control your emotions, look at cold hard facts and take into account your gut feeling on individual investments, as well as investment markets, there is the potential to make a good living. Chasing overvalued properties and selling undervalued real estate is a fool’s game in the long term.
