REAL ESTATE INVESTMENT IS IDEAL WAY TO GROW PERSONAL WEALTH

REAL ESTATE INVESTMENT IS IDEAL WAY TO GROW PERSONAL WEALTH

When it comes to long-term investment, there are few asset classes that have the same benefits as property, especially for building a foundation on which to grow personal wealth.

Many astute property buyers who have followed the key principles of property investment have been able to reap the rewards of their actions and see good returns on their investment.

“Even with the correction in the market experienced after 2007, those who got into the market at the right time and make the correct decisions at the beginning of the process, would have seen substantial growth in in their investment value.”

The key to unlocking investment potential is knowledge – regardless of the type of investment, it is always best to choose something that you understand.

Property investors need to research the market and understand the environment in which they are buying or selling property. Knowledge and understanding will play a vital role in the success of any investment venture. You need to know what factors have an impact on the market, along with how these aspects influence the market.

All the fundamentals of investment should be carefully measure to ensure you make an informed decision. It’s important to consider elements such as the property’s location, the type of property, market phase and future appreciation potential.

Seeking professional advice will come at a cost – but not seeking advice could be more costly. Gaining insight from a seasoned property investor or financial advisor could mean the difference between a sound property investment and pouring finances into a money trap. However, a real estate investment is far less volatile and more forgiving than many other investment vehicles such as share or equity markets.

The share and equity markets often fluctuate over the investment period, over the long term, property values appreciate far more steadily.

The property market is cyclical, so if you watch and understand the market influences you will be able to time your entry into the market. Compared with other assets, property market cycles make it far more accurate to estimate a return on investment.

A major advantage to property investment is the fact that the owners of the property have complete control over their asset. It is also the only form of investment that can be financed and used as leverage.

Property can be used as collateral against itself, so banks are willing to grant property buyers finance to buy. Because the value of the property continues to grow, banks know that they will be able to largely mitigate their losses by selling the property if buyers default. As a result financing property is far less risky for financial institutions than financing any other type of asset class.

An ideal investment is one that outgrows inflation, or at the very least matches it. This is knowns as n inflation hedged investment, of which property is one. As the value of the property increases over time, the outstanding bond amount will decrease. There is also the additional benefit of being able to let the property and receive rental income, which will help pay for the growing asset.