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Five Tips To Retire Through Property Investment

property investmentAmassing a big portfolio can seem to be a daunting task. In times that we live in, a majority of individuals retire without a decent post-retirement nest egg. Of course, they are doing something wrong which you can do right. Let me talk about a few mantras that each investor will do well to keep his sights on.

Tip 1# Anticipate property plateaus

Property market works in cycles. Of course, this is not to say that prices of properties cannot move counter-cyclically. The bottom line is that you must have the acumen to read the pulse of the market. If you can anticipate when the market may plateau and make your property investment at that point in time, you can make gains even if you are not a big believer in holding properties for long.

Tip 2# Renovate strategically

Renovate properties keeping in mind the investor mindset. You are an investor and you know people prefer structural improvements to cosmetic ones- that they will be lured by, say, an extra bedroom more than a swimming pool. Also, while renovating, think of catering to the widest range of investors. It may not be prudent to make a modification in your home which puts off a particular section of investors, thereby reducing your prospective client base.

Tip 3# Widen accessibility

When you buy a property, the idea is to be accessible to as many people as possible. Also, you have to keep in mind where a majority of people want to live today. If you research diligently, you will find that the focus lies within the 5-15 kilometre radius from the CBD.

Tip 4# Be inclined towards capital growth

Smart rental income can sometimes flatter to deceive. While there is no doubting the use of positive cash flow and subsequent rental yield, the real money lies in capital growth. This is why you should endure the brunt of paying your mortgage out of the pocket (and still employ negative gearing) but work on receiving capital gains.

Tip 5# Employ professionals

Real estate world is not an easy one to conquer and in the beginning it may be unwise buying properties without professional assistance. Each dubious contract of sale signifies the importance of a conveyancer and each over quoted property warrants the guidance of a buyer’s agent.

There is nothing wrong with the desire to retire on your portfolio but not unless you are keen to do the basics right in the world of property investment. Here is hoping that that I could be of some help here.

Which do you go for between ‘rental yield’ and ‘capital growth’?