On the surface the worldwide property market seems fairly straightforward, a property is built, sold and then resold time and time again. In essence this is what the worldwide property market is all about but it does leave a lot of space for creativity. Those looking to beat the market to the next hot spot, identify the next new trend or perhaps even bailout before the markets turn can stray from the crowd to crystallise a good return.
There are two main types of property investor, those who lead based upon their own research and knowledge and those who follow.
To be a leader in the world a property you need to have confidence, knowledge and ensure that your research is well founded. From a distance it may seem a little difficult to become a leader in the property market but very often it comes down to your basic personality. Are you confident? Do you prefer to work alone? Are you prepared to go out on a limb with an idea you have been thinking about?
The property experts we know today have taken many years to build their reputations as leaders in the field of property. This has not happened overnight, this has not been the result of one good investment but solid research and advice. The advice will not always turn out to be correct but if you can validate this with facts and statistics then it is likely you will be right more often than you are wrong.
The vast majority of people investing in the worldwide property market today are followers, people who follow trends, follow the latest news and advice from experts. There is nothing wrong with being a follower, indeed many investors have made a career out of this, but by the time you follow the leaders some of the potential profit margin will already have been eroded.
If we look at property hotspots emerging around the world they tend to start fairly quietly but once the “leaders” are invested then the followers are informed. In what has the look of a self-fulfilling prophecy the wave of demand from property investment followers can push prices way above fair value. However, as long as the demand is there, and the story has not changed, many followers will continue to plough money in without giving their investment the consideration it deserves.
Research, location and price
From a distance it may look a little difficult to become a leader in the world of property but the Internet now gives you access to unbounded research, you can check any location in the world from your armchair and price data is readily available. There is nothing to stop any property investor becoming a leader in their own field, researching their own deals and perhaps not following the crowd as much.
There are obviously risks involved in “going against the market” and timing is essential but if you have a long-term investment view and your facts and figures are correct then the markets should react at some point. In a world of small margins, jumping aboard a potential future hotspot can significantly increase your potential profit margin. There are risks involved, you won’t always get it right but then again following the crowd is not a guarantee of success.