5 considerations when investing money in the property market

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5 considerations when investing money in the property market

investing money
Investing money is not an easy task when you decide to do it for first time. First and foremost you should think about which kind of investment you want to place your money and how much you can afford to invest. After that, you will have to take into account other factors that will contribute to the successful outcome of your investment decision.

We are fully aware that taking the first steps to investing your hard earned money in the property market can be difficult, however this article is here to guide you, so you will make the best possible investment choices and avoid any costly mistakes.

Research the property market

What do you know about the property market? It is necessary that you conduct in-depth research about the sector in which you are interested in investing your money. Never consider purchasing real estate in an area in which you are unfamiliar.

It is important to highlight that there are several expert property consultants that can inform you about the property market and advice about which kind of property investment is the most appropriate for your situation.

Set your goals from the beginning

Of course, your final objective is to increase your savings, but there are many ways to achieve it. For this reason, we must start answering some questions to know which property investment strategy fits better with your profile.

Some of the questions are:
• What do you expect to achieve from your property investment?
• For how long do you want to invest?
• How much are you able to invest?
(Don’t forget to be realistic in your responses!)

How much you can afford to invest?

Depending on the money you can afford to invest, you will be able to access certain properties or others. The reason is that all property investments set a minimum amount to invest from as little as £10,000 up to as much as you want, but the good news is that you can find a wide range of options to suit your budget.

Income or growth fund?

Another thing that you must consider is if you would prefer an income or growth fund.
The income fund offers returns based on the profits of the companies into which the capital in invested. The growth option consists in increasing the original fund invested as much as possible or, in other cases; it is based on a set amount. Your choice will depend on you individual circumstances and investment goals, so if you have any doubt about which option is best for you, do not hesitate to contact an expert adviser.

Short-term, medium-term or long-term?

This is a very important point: choosing the duration of your property investment.
Short-term: investments that take less than 5 years. In this case, the risk is low unless investors prefer not to set a fixed cost hoping to get a better return.
Medium-term: from 5 to 9 years. Investors are able to tolerate some volatility in markets and need to protect their portfolios against inflation. It is an effective balance between protecting the assets accumulated while achieving the growth that can help you build your assets and offset inflation.
Long-term: Buying property and holding onto it to benefit from capital growth while the price of the asset increases over time and the market matures is probably the most secure investment strategies. It is aimed at those investors who don’t need to access their savings for at least the next 10 years, so is therefore also a very good retirement option.
These are some points that you must consider before deciding investing your money in property market.

If you have any doubt, do not hesitate to contact expert consultants!