This is surely the holy grail of property investment advice, there isn't an investor alive that doesn't want higher returns from their investments, but the advice on how to get their is vast and varied. It would be nice to say, there is no right or wrong when it comes to a property investment strategy, but there is; and unfortunately there are far too many people online claiming to be experts and explaining how to get it very wrong indeed. Of course anyone can make a mistake, but some of the advice on property investment you read online is nothing short of criminal.
The important thing for us is not to try and be too specific or time-sensitive; what works today probably won't work in 6 months, and a property investment guide published online is there forever. Who here hasn't read an article thinking oh my god that's terrible, or brilliant, only to find out that the date on the article is 5 months previous.
What will always work when it comes to a high return strategy for investing in property is reducing the number of variables. This is always a good idea when it comes to any investment, reducing the variables involved is tantamount to reducing the risk involved. And it sounds harder than it is.
Say we are investing in a real estate investment trust for Europe, the list of variables could be:
- What countries will it be purchasing in?
- What types of property will it be purchasing (retail, commercial, residential, malls or offices etc)?
- What class of properties will it be buying?
A 200 million euro fund could buy 4000 properties at 50k Euros, or 20 properties at 1 million pound, and what would be the best strategy would be dependent on what countries and types of property it was buying.
- Is our money held in Escrow?
- Can we get our money out in a reasonable amount of time if things start to turn sour?
- How much/What Percentage are we paying to the fund manager(s) salary?
That will by no means be a complete list of variables, because the list of variables is in itself a variable, but it will give you an idea of what kind of things to be looking at. In each of the variables above a simple phone call (probably with a 2 hour wait) or an email would turn it into a constant and the more constants you have the more knowledge you have about what you are putting your money into. Reducing the variables of investments ensures that you are in control of the investments you make, and can therefore strive for higher returns.
*This page is provided for information purposes only and should not be construed as offering advice. IPIN is not licensed to give financial advice and all information provided by IPIN regarding real estate should never be treated as specific advice or regulations. This is standard practice with property investment companies as the purchase of property as an investment is not regulated by the UK or other Financial Services Authorities.