Follow institutional investors for long-term property returns

If you look at the worldwide property market today it is quite literally in disarray. We have some markets yet to recover from the 2008/9 worldwide economic downturn, markets flying high such as Canada while others like the UK are taking breath ahead of the EU membership referendum. Those with relatively little experience in the worldwide property market might wonder where to start, when is the right time to invest as well as where to research their next investment.

However, are property investors making it more difficult for themselves when they have massive investment institutions declaring their property interests in public?

Take a step back and consider

Institutional investors in the worldwide property market would not be against taking a short-term profit but on the whole they look long term. They are looking for long-term capital appreciation as well as long-term rental income using the vast array of research tools and contacts at their disposable. As many of the larger property transactions are made public relatively quickly there are ways and means of tracking the strategies of some of the larger institutional investor groups.

As a consequence, when you are finding it difficult to find guidance and forward-thinking ideas perhaps just take a look at how the institutional investors are allocating their funds?

Investment horizons

The investment strategies and investment horizons of private investors and institutional investors can vary. There are various costs to take into consideration as well as tax issues but what do both sets of investors require? If you ask each type of property investor they are looking for long-term security with long-term capital appreciation. So, while the detail may be slightly different between these two groups of investors, ultimately are they not in search of the same end result?

We then move onto the subject of funds available for investment, with institutional investors obviously having far greater firepower and funding available. However, we are not necessary looking to buy into the same properties, or the same developments, but more taking a broader approach to long-term property investment. If you see institutional investors acquiring specific types of assets in a specific area then surely this must be worth looking into?

Confirming a future strategy

Once you have spotted a pattern forming around institutional investors then it is time to look further into the area, the type of property and the history of that particular property market. If your own research rubber stamps the move by institutional investors then it is time to start burrowing down and looking for affordable investments for your portfolio.

It is sometimes easy to forget the enormous firepower, research and contacts which these institutional investors have to hand. One area which may prove interesting in the medium to longer term is the Spanish property market with observers waiting for institutional investors to eventually mop up the unwanted repossessed properties dormant on bank balance sheets.

As and when institutional investors decide to mop up this unwanted stock is that a sign that the Spanish property market may be turning?

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