For some individuals, the concept of investment is something that has become second nature over time. With high volumes of disposable income and an eye for generating profitable returns, it appears relatively easy to create a strong investment portfolio which more than repays an initial investment over a concerted period of time.
For those who are new to the bold and risk-laden world of investment, however, the most significant challenge is to develop a portfolio that generates long-term returns. The changeable nature of the economy means that there are very few ‘safe’ investment options available, so it is imperative that you use your knowledge and experience to achieve a sustainable profit.
How to Invest in Private Real Estate: The Dos and Don’ts
In the last twelve months, it is the private real estate sector that has emerged as one of the most profitable and reliable investment opportunities. Although recent fluctuations in the market mean that this may be likely to change in the near future, there is still plenty of money to be made by investing in private real estate. This is a challenging market, however, so you will need to keep the following dos and don’ts in mind when investing:
- Research economic trends in Geographic Regions: While some locations such as London offer consistent value to real estate investors, others in Bulgaria, Turkey and Cyprus have seen significant decline in property value since the Great Recession. You must therefore do your research and choose an area that can deliver reliable returns.
- Consider Sustainable Real Estate Investment: One of the most prominent trends in modern real estate investment is sustainability, so it may be worth committing your capital into eco-friendly projects and properties on an international scale if you are to maximise profitability.
- Reduce Costs where possible when buying to Let: When entering the competitive buy-to-let market, it is important that you focus on all necessary costs. These include the cumulative cost of decorating and furnishing properties, so consider partnering with affordable and reputable supplier such as David Phillips.
- Invest with Short-term Goals in Mind: It is the desire to achieve a quick profit that encourages many investors to hijack short-term real estate trends, especially in relatively untapped markets such as Bulgaria and Cyprus. This should be avoided, however, as once these markets decline you will be unable to recoup your investment and may ultimately lose significant sums of money.
- Place all your Capital in a Single Market: The international real estate market is extremely changeable, so it is important that you diversify your portfolio and invest in numerous prosperous regions. This ensures that your portfolio will always hold substantial value and also enables you to minimise the risk of financial loss.
- Invest without a Clearly Defined Strategy: Whether you choose to invest in the stock market or the real estate sector, it is crucial that you have a carefully honed strategy that underpins every single decision that you make. This enables you to invest with your head rather than your heart, so you can avoid making emotive decisions that betray your philosophy and cause you to lose money over time.
In every investing endeavor, you need a team who will be able to help you on your specific needs if y. This also holds true in real estate investing.
You need to find mentors who have been-there-and-done-that. You also need to partner with banks, real estate brokers and lawyers who can offer you valuable investing resources and opportunities.