What was the best advice you ever received about property investment?

The world of property investment is a kaleidoscope of characters, personalities and different strategies. We all have our favourite properties, favourite sectors and sometimes it can be difficult to spread our wings to take in the whole property market. Along the way you will receive advice from friends, family and acquaintances about investing in property. History shows us that those willing to learn are the ones who will make the best returns in the longer term. The fact is you will never know everything about property investment and learning from others who have been there and done it is the best education you could wish for.

Investing in education

To all intents and purposes any investment market is simply a numbers game with some human emotion thrown in. The property market is no different and rather than jump in with both feet to investing your hard earned cash you need to invest in your property market education first. Ensure that you follow all property market news, look at historic trends and patterns and above all keep yourself up-to-date with the latest valuation trends.

Property markets can move fairly quickly and trends can emerge around the world at the drop of a hat. If you have at least some background about how the market works, how human emotion impacts valuations and learn how to take advantage of these elements that is certainly a good start.

Land is not an inexhaustible supply

Whether you are looking to buy property for yourself or as investment, remember that land is not an inexhaustible supply. Therefore as the human population continues to grow and demand for property increases ultimately landed in the right area will “not lose its value”. There will be short to medium-term movements, trends will impact the value of certain land but on the whole demand for real estate/land will continue to grow.

To create the best long-term returns for real estate/land investment you need to negotiate the right price, invest in the right areas and know when to buy and when to sell. Take advantage of short-term property price swings when human emotions can push prices above and below “fair value”.

Never be afraid to take a loss

In many ways it is easy to bank a profit, many of us will sell too early, but how many of us have properties which we have held for some time which are valued below the price we paid? Investing is all relative, the relative return on investments you have against the potential relative return of investing that money elsewhere. Taking a loss is probably one of the hardest things you learn to do because it goes against the grain and is ultimately a blow to your ego.

However, holding onto a property on which you are losing money simply so that you can “prove you were right” in the future is a fool’s paradise.

Study economics

As an extension of the “property education” suggestion above many people will at some point look at basic level economics to see what drives markets. The fact is you can have the best property in the best area at the best price but if the local economy is struggling then this will impact demand and ultimately the value of your investment. It is also worthwhile educating yourself on the way in which interest rates directly impact the property market. The worldwide economic collapse in 2008 is a phenomenon which many of us will never see again but it offers a very interesting insight into how interest rates and economic difficulties impact markets. As they say, knowledge is power…………

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