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How to safely invest in property

How to safely invest in property

Like most things in life, there is a smart way, and a not so smart way to invest in property. Safe property investing is all about doing it the smart way, to get the simple things right, avoid common mistakes and maximise your results.

Remember, there is no one property market, but rather many individual ones, all performing differently at different times. There are always great opportunities to be found - if you know how and where to look - so you can safely invest in property at any time - whether property overall is rising, falling or holding steady.

Here are three key ingredients for safe property investing:

1.  Get the help you need

Investing in property is completely different to buying your own home, and sometimes we don’t know what we don’t know. Simply having a go, without the necessary expertise and experience, is risky.

To invest in property safely, unless you’re an experienced full-time property investor, you might want to tap into the experience and knowledge of experts in property and finance, to get the help you need.

2.  Rely on good research

Most property investors who fail have bought the wrong property in the wrong location. Often it’s because they’ve chosen their investment property the same way you'd chose a home to live in - you like the area, you like the house, done. And if it’s around the corner, even better - you can keep an eye on it (as if it could grow legs and run away at a moments notice!).

How familiar you are with the area, or how appealing you find the property personally, means nothing when it comes to your property doing it’s one and only job - to grow in value and provide you with an income. Rather we must ask what’s driving demand and growth: local economic drivers, job creation, population growth, infrastructure investment and future supply of property.

Good research is essential to getting the answers to these questions and the information you need to make smart, informed decisions, and ultimately secure the right property, in a growing location, for the right price.

3.  Have a plan

Knowing how best to begin or grow a property portfolio can be confusing. What will work for you, may be very different to what you may have seen your friends and family do. A well thought-through, personalised plan is a must, and should be based on why you are investing in property in the first place, and your ultimate goals are for your portfolio.

A good starting point is your current financial circumstances, to make sure your next move is financially comfortable when it comes to how much you will borrow, and what will be the expected cashflow from your chosen property.

Another key factor in your plan is where you are in your working life, and how long until you plan to retire. This will affect how long you have to grow your assets while still working, and how many properties you could expect to end up with in your portfolio.

If investing in property isn’t your full-time job, then coming up with this sort of plan, and getting your hands on reliable research can be tricky. That’s why going it alone, without the necessary experience or knowledge, is the undoing of many DIY property investors. Safe property investing means getting the help you need from the right team of property and finance experts.

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