The hare and the tortoise of property investment

We all know the story of the hare and the tortoise which essentially suggests that slow and steady will always win in the end. Have you ever looked at the property investment market and wondered why everything needs to be overvalued or undervalued and nothing ever seems to be steady? Do investors really need to chase property prices as hard as they can or literally dump everything at the first sign of trouble?

Long-term investment

If you talk to any financial experts they will tell you the real estate/property investment should be seen as a long-term project. There may well be chances to pocket short-term profits, you may receive offers you cannot refuse but ultimately in the longer term many property investments can become cash cows. The income generated by your property portfolio in the longer term can, and in many cases should, be used to expand your portfolio going forward.

There is no real definition of a long-term investment because it will vary from person to person but the fact that many people see property investment as their “pension fund of the future” just about says everything. Steady as she goes, take a long-term view and if the long-term potential does change then you can always consider switching your investments.

Chasing short-term profits

There is nothing wrong with banking a short-term profit, there is nothing wrong in taking advantage of opportunities in front of you but if your whole property portfolio is based upon short-term investments you will eventually become unstuck. The best minds in the investment market did not foresee the 2007/8 worldwide economic downturn. Even as this downturn was beginning to gather pace some “experts” still suggested that areas such as Dubai would be protected from the economic turbulence. This shows that every now and again events will emerge which nobody could ever have foreseen and unfortunately nobody has ever experienced.

If you get the impression we are suggesting that short-term speculators are one of the downsides to the worldwide property market, this is not the impression we want to give. The simple fact is short-term speculators, buyers and sellers, are very important in terms of liquidity and finding buyers/sellers at relatively short notice. They play a vital role in any investment market, whether property, stocks and shares, etc although very often they are painted as the devil incarnate.

Successful property investors

You could stick a pin in a list of successful property investors and we guarantee there will have been recent reports of them banking large profits on their property investments. Many of these headlines give the impression of a short-term return of a more speculative nature when in reality these investments may have been held for many years. The general press never seem to cover the long-term backbone of property investments which many investors hold because very often these are seen as “boring”.

In reality the headline making short-term speculative investment returns which many successful property investors are involved in are but a tiny percentage of their overall property portfolios. It is not the norm to see successful property investors ploughing millions of pounds into short-term investments, successful investors will avoid excessive risk as a rule of thumb but if there is the opportunity to bank a short-term profit they would be foolish to turn this down.


Leave a Reply

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>