When it comes to Property investment, lots of folks begin with ‘what they know.’ This means purchasing a property, renovating it and then selling it at a profit, or purchasing a property then letting it all out. However, after you have Some property investment under your belt and until you seem to do ‘more of the same’ then it is worth making certain your next investment work in good and bad economic conditions, possibly deliver a yield at different times or in various ways to your present investments. So what exactly does your property investment deliver right now? Not sure? Then write down the following:
What have you invested? Do not forget to include all the expenses you have incurred from legal penalties to polls, required certificates any broker’s fees in addition to large amounts such as deposits.
What have you earned? Calculate what your investments have delivered to you thus far. Increased capital?
Work Out the yield – Then take the whole amount your investments have/are delivering to you and divide this by the amount you have invested.
Check this against other prospective returns – If you are investing in residential buy to let, assess the returns you may be receiving against commercial investments. If you are doing renovations, then assess what you can get if you purchased property and built a house. Better still; check the buy to let returns from building a house and then leasing it out.
Always check your investments from the exit plan! It is difficult to work out if an investment works for you unless you have got a clear exit plan. Are certain you know exactly what you anticipate your properties worth to grow to, what income you will need to make it worthwhile holding on to your property advantage?
Understand market conditions! Also be clear on what is going on in the market. Some people worked out that selling in 2007 in the height of the marketplace was a fantastic idea, they are those investing back in the industry today as they have the money to do so.
Having done your Research you will find something which provides a much better return to your own investments. However you also may choose to ‘continue with what you know’. In any event, at least you have completed your investment due diligence and know whether there’s a property investment opportunity which makes sense to improve your investments or not!