Is Property Still a Good Investment?

Many people, myself included, have been brought up with the advice from our parents that getting onto the property ladder is the most important thing you’ll ever do in life. To be fair, investing in property will almost certainly be the biggest and most daunting investment you’ll ever make but is it going to be as beneficial as it has been for older generations? Is property really still such a good investment? Here are some things to think about:

The value of money – When looking to invest in property or any other shares it is useful to understand the state of the market as a whole. Check out the latest Forex  rates to see the value of your currency and keep a close eye on the highs and lows of the Australian Securities Exchange to follow the fortunes of big businesses. Fluctuations in the property market are crucial to your investment – with prices dictating the real terms value of the money you are tying up in bricks and mortar. Interest rates, too, are key. An assessment of these will help you to determine whether you opt for a flexible or fixed rate mortgage to fund your purchase. Put simply the value of money – be it the currency rate, wider economy, localised property market or interest rates – is important and you need to understand it thoroughly.

Think ahead – Before you get started you need to consider where to buy property, the types of property that people are interested in and whether you will be able to increase its value. Maybe you want to buy a property to rent out as a holiday home? Researching the types of properties that are popular and the demographic of the people likely to visit are important. Remember, the population may well change over the coming years and you will want to invest in a property that is desired in the future not just now. If it’s dated now, what will it be like in a decade’s time?

Be practical – It’s important that you don’t get too carried away with the type of property that you invest in. There is no point committing every dollar you earn for the next 30 years in a property if you aren’t going to be able to enjoy your life in the meantime. So think practically about whether you really need to invest in a place that has five bedrooms if two or three are enough. If you’re buying a second home, ensure that your budget isn’t stretched too far in a bid to make cash in the medium to long term. Overstretching yourself at the start might mean that you never reach the profit promised land.

Property condition – Be wary of the condition of the building. If you are a highly skilled builder then investing in a place that needs a complete makeover will be of no concern; but if not then look for properties that just need some TLC. A fresh coat of paint, new carpets or even a new bathroom will hugely increase the value of your property. Buying properties that have already been completed to a very high specification are difficult to add value to – but are likely to pick up in price quicker.