There are many different types of strategies which investors use when looking to acquire property assets. Whichever strategy or strategies you use will depend upon your own preferences and your strengths and weaknesses. It will also depend heavily upon your financial situation and what type of risk/reward ratio you are looking at. However, should you stick with tried and tested property investment strategies or should you widen your horizons?
Sticking with what works for you
There are many strategies around such as acquiring properties offering attractive rental yields and perhaps limited capital growth in the short to medium term. This type of strategy will give you additional rental income over and above the average which will allow you to pay down your property related debt at a quicker rate than normal. The downside is that due to limited capital growth prospects it is unlikely you would be able to bank a large profit when you finally dispose of your property (after taking into account inflation).
There is nothing wrong with sticking to a strategy which works for you but one thing you do need to bear in mind, the property market is a changing animal and there may be other more potentially lucrative strategies to consider.
Moving with the times
It really will come down to personal preference but, for example, in the current low interest rate environment it is more attractive to take on debt to acquire property assets. Which asset you take on will obviously depend upon their individual circumstances, value and income but the lower interest rates the lower your repayments.
If we look at the UK we are in a strange situation because the property market has been doing well yet the economy has been struggling. Some would say it is this “cheap finance” that is feeding the growth in popularity for UK property but there are also other factors to take into consideration. If you move with the times with regards to your investment strategies, learn by your experiences and research alternative strategies, you may find something which works for you. However, timing will be of the essence!
Timing is the key
If you have tried and tested ideas and strategies which work for you on a long-term basis then stick with these strategies. However, even with these tried and tested strategies there will be a time to buy, time to hold and a time to sell – a little bit like poker as they say in the song…
If you are moving with the times and embracing fashionable new investment strategies this will not only broaden your horizons but potentially give you greater opportunities for increased returns. One thing to bear in mind if you are “moving with the times” is to learn the signs when this fashion/trend is starting to fade and will soon be replaced by something else. Time and time again you will see that the “hot money” from more speculative investors moves from market to market, investment strategy to investment strategy and you do not want to get left “holding the baby” when everybody else moves on.