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Advice for Property Investors

By Parmdeep Vadesha

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Published: 02Sep2008
Word count: 531
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Location, location, location. This is what property investing is all about. Just as full-time property investor Alan Forsyth stresses: The location of a property commands the profits you bring in and capital growth it provides. However, not all investors are knowledgeable enough to recognize a profitable location.

Many investors, especially beginners, tend to be shortsighted and limit their sights to the area where they live. While this may seem the most sensible decision, what these investors do not realize is that they are curbing their chances of finding profitable opportunities for the long term. In comparison, professional property investors sometimes go out of their safety zone and scout farther out of their area to find profitable properties.

If there's one thing that novices to property investing should avoid, it's restricting themselves to being partial to areas just because they would like to live there. Instead, they should concentrate on the following: the potential returns, expenses involved in buying and selling, costs of loaning money, and the appeal the property will have on prospective tenants or buyers.

Thus, building wealth through property investments mean that you need to find a location poised for capital growth, which means places where values in property are expected to rise, allowing you to build your wealth and expand your portfolio. Some aspects that suggest growth are: a developing economy, places where demand for properties exceeds supply, and where costs of borrowing are low.

Now, you might be the type of investor who wants to make sure that your property will only suffer less when the market adjusts, and which will likely hold its value, making the investment a stable in the long-term. Here are some pointers to consider:

1. Quality. If you want an excellent long-term bet in an uncertain market, you have to make sure that the property is of good quality in addition to excellent location. This may mean houses with unique features, or it could be located in a pretty town that will have people yearning to live there, or being in close proximity to schools or amenities. These factors win over buyers and make the place more resilient to any declines in the market.

2. Popular locations. There are certain places that seem to constantly attract buyers. These include locations by the seaside, market towns, appealing suburbs with family houses, and good commuter towns. What all these places have is a mixture of healthy demand and inadequate supply.

3. Buy in places with established reputation. Be on the lookout for areas that have been left behind in the property boom. In times when the market is strong, the surge extends outwards and buyers tend to move to the fringes. During a slow market, the tide will retreat, prompting values to decline faster at the edge.

Building wealth out of investment properties is not difficult if you have the determination to succeed and the knowledge to guide you in the right direction. By following the advice and the footsteps of property experts like Alan Forsyth, who offers relevant advice and educational courses for investors, you will be well on your way to becoming the next successful property investor.

Parmdeep Vadesha is a property investment expert and founder of the largest community of property entrepreneurs on the web who buy below market value properties from distressed homeowners facing repossession, divorce and bankruptcy. He writes a monthly newsletter for over 70,000 property investors worldwide - http://www.Property-System.com

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