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Property Investing Strategies in a Stabilising Market

By Parmdeep Vadesha

Republish: EasyPublish™ Published: 25Nov2008 Word count: 616 Viewed: 150 time(s) Get Free Content For Your Site

The credit crunch has forced many people in the UK to divest themselves of some of their assets. This is a normal reaction to a declining market. But what about those property investing entrepreneurs who have chosen to hold on to their investments, are adding to their portfolio and are even taking advantage of the credit crunch? Why are these investors acting differently from the many others in the midst of a so-called gloomy outlook?

Holding on to your property

It isn't surprising that many property investors have wisely opted to hang on to their properties in spite of a slowdown. Property is regarded as the best option for long-term capital growth and it provides an opportunity to earn long-term profits especially for those who buy in the right place at the right time. Over the long term, property prices have the tendency to move in cycles with property doubling in value generally every seven to ten years. This means that an investment property such as a buy to let investment property can be a prudent choice as long as it's selected carefully and with expert guidance.

Also, the present buyers market has resulted in less confident banks and fewer suitable mortgage products for borrowers. Due to this, the number of potential buyers has considerably declined. This means that a property may not sell unless the owner prices it way below market value. Selling in the current market also poses a few disadvantages such as agents' fees, solicitor's fees and capital gains tax for those who own the property as a 2nd home or investment property.

Adding to your portfolio

Many investors have found that the present market is a good time to add to their portfolio. This is because of the glut of affordable properties being put up for sale in the market. Auctions in particular are good sources of cheap properties such as repossessed homes that can be acquired for as low as 30% below market value. As part of a smart property investing strategy, the key to making a good investment is to acquire properties at BMV prices. It doesn't only provide enormous profits. It's also the secret to obtaining little or no money down financing - an excellent strategy for investors looking to expand their portfolio.

A buy to let property is considered a good addition to a property portfolio. Buy to let has been viewed by many as a stable and resilient market because of the considerable returns it has generated. One important aspect about the buy to let industry is that the rental market is predicted to remain strong due to robust demand from tenants and from young professionals who have decided to forgo making a property purchase until a later phase in their lives as a result of the scarcity of mortgage products available for them.

Taking advantage of the credit crunch

While a credit crunch is extremely unfavourable for many, benefiting from it isn't an improbability. As bad as it may sound, the economic downturn still poses a number of opportunities for the property investor. One is that you can take advantage of the competitive rates being offered by pursuing alteration plans for your property. The slowdown in the economy means that people will consider remaining in their current homes for a longer period which means that owners will be inclined to implement improvements on their properties.

Therefore a decline in the property market doesn't have to be all doom and gloom. As long as you know how to play your cards right and implement effective property investing techniques, you'll be able to survive the current property market.

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