Real Estate News, Reviews and Investment
Over the next weeks I will explore the concepts of property investment- today and into the future, but for today here’s the framework…
Proposition one: Property investment is the use of excess capital/income to generate further income, capital appreciation or to leverage debt. (Include ideas about appropriate risk/yield levels for property.)
Proposition two: For the individual- buying a home is only about necessity or lifestyle and holiday homes are at best a mixed approach of excess money being used to finance ‘holiday annuities’ partially subsidized by rental with a capital ‘retirement’ bonus at some point in the future.
Proposition three: Businesses, funds and governments have the resources to afford professional valuers, market analysts and economic consultants to show how owned property can save cash-flow expenses, provide ‘safe’ income and increase wealth gradually over time as well as hedging the risk of exposure in other markets.
Proposition four: Property investment needs to be in multiples or portfolios, Eggs and baskets spring to mind when I read about singular property investments. Portfolios of property may have a commonality but with pre-determined strategies can still provide a predictable return.
Proposition five: Just because property investment is good for one does not mean it will be good for another… ‘Holding Power’ What percentage of your capital can you allow to be tied up in a non-liquid asset?
Proposition six: Not all property is equal- shoe box flats, luxury condos, residential suburbs, commercial, industrial, overseas and owner operated. Each of these has its own investment signature and should only be entered into after careful analysis.
Proposition seven: Property lifetime, not just lease versus freehold but the actual timeline of earning power generated by a property, just because concrete lasts generations does not mean your luxury-city-apartment will still command super-profit-yields for ever.
Proposition eight: The future?
In the next couple of days I will post a general wish list concerning future property markets and who should be deciding the future… Then on friday I have a lovely factual based example based on the Singapore property market I heard at seminar last week….