At some point in all of our lives we will come across the intricacies of the property market whether this is via a purchase, rental arrangement or even an inheritance. The fact that for the majority of people a property purchase will be their largest individual investment in their lifetime means that it is never too soon to start learning about property markets. There are many different angles to consider, many different options but for those looking to start out in the world of property investment here are a few matters to consider.
Whether you are 19 years old or 90 years old there will be financial restraints on the amount of funding you have available and how your future financial liabilities may change. Perhaps the most important lesson you could ever learn about property investment is not to over stretch yourself and leave “financial headroom” in the event of unforeseen costs in the future. These costs may directly relate to your property investments or your personal life.
The property arena is littered with individuals who started well with their career in property investment although unfortunately overstepped their financial boundaries with disastrous consequences.
Know your market
The world of property investment offers so many different opportunities, so many different investment strategies and you will very often see history repeating itself. If you have a genuine interest in property then you need to “know your market” whether this is your local property market or even one overseas. So, why not start with research into your local property market, get to know the characteristics, the personality and the changing shape which is impacted by so many different factors including the economy, local services and transport infrastructure.
While “fairly easy on paper” why not carry out theoretical purchases of property and look back over the months and years to come to see how you would have performed? To get any real value out of this particular exercise you have to be honest, you have to be focused and make the genuine decisions you would have made in the real world.
Maintain focus on the long-term
Whether we like it or not it is highly unlikely that any of us will buy at the bottom of a property market cycle and sell at the top. We may hope for this, we may try for this but the reality is that timing of such focus is more luck than judgement. If over the life of your property investment career you buy towards the bottom more times than you buy towards the top of the market you will do well. However, while short-term timing can give you that extra “icing on the cake” always maintain focus on the long-term picture.
When you consider that the purchase of a property will likely be the largest investment the majority of people will make in their lifetime, it is never too soon to start learning. Indeed there is an argument that we should be more focused on investment in the school curriculum so that those leaving the education system are not suddenly parachuted into situations in which they have no experience or knowledge. Why do we not teach the pros and cons of property investment, and indeed other types of investment, to those approaching their adult life?