Four key considerations when investing in property
ONE OF the most popular types of investment is property. Investing in bricks and mortar has, for a long time, been considered one of the most profitable and reliable opportunities available. Furthermore, with a barrage of investments to choose from other than the more common buy-to-let scenario, there is an option to suit every type of investor.
However, regardless of how experienced you are as investor, or whether you are completely new to the game, there are things you should bear in mind when considering investing in any sector of property.
Don’t act with your heart but with your head
When entering into any investment it can often be a natural instinct to lead with the heart rather than your mind. When it comes to property, we can often be blinded by beautiful homes or promising returns. For example, an individual purchasing a buy-to-let property may be blinded by the opportunities it presents when there are no tenants living there.
Becoming emotionally invested in an investment can make it tricky to walk away from, even if you have done the calculations and the numbers don’t add up. Investors should consider keeping a subjective mindset at all time and remember that financial gain is the goal from any property investment.
Conduct thorough research
Do you understand your potential investment well enough to explain the ins and outs to somebody else? Researching opportunities can be beneficial; it allows investors to foreshadow certain issues and recognise how to get the best out of the money they have invested.
If you can’t clearly explain the opportunity in front of you, consider contacting a professional financial adviser for assistance. Getting the opinion and guidance of an expert in the field can help investors avoid losses through lack of knowledge.
Take into consideration your personal circumstances and goals
Overestimating how much work you are willing to put into an investment can have a negative impact on your capital in the long run. Depending on which route you take, property investment can range from being a large to small part of your day to day life. Take into consideration how much time you can realistically invest into opportunities and what your goals are with investment.
For investors looking to invest in property without having to buy a physical property, Wellesley’s property investments allow investors the opportunity to capitalise on property-backed loans acquired by Wellesley. In return, investors receive a fixed rate of up to six per cent per annum gross and are able to manage their accounts online. It is important to remember that as with most investments, there is a risk that if a borrower does not repay, you may lose some or all of your initially invested capital.
Don’t take on investments without a strategy
Seeing an investment project or opportunity through to the end is key to achieving goals. However, it is unlikely to happen without investment strategies and methodologies in place so that investors can get the best out of their money.
Avenues of property investment such as property renovation and buy-to-let can come with a number of hidden costs that will need to be factored in ahead of schedule. Therefore, it can be helpful to sit down and discuss property investment opportunities with a financial professional so that you are handling your money in a way best suited to your circumstances and goals.
Click here for more information on Wellesley’s investment opportunities.