Buying physical property is the most traditional way of investment, and with the ever increasing population, the demand for real estate looks to be on an upward trajectory over a long period of time to come.
What does this mean for an investor who is looking at taking exposure through this investment vehicle?
Does it mean anything one would touch would turn gold?
To my mind, the answer is a BIG NO!
There are some pitfalls that one should be wary off and draw the investment decision after some of these considerations
1. Don't compromise on location:
If not the best, because all of that would come at a price, ensure you surely buy a good location. An analogy can be drawn from our Golden rule number 1. while investing in stocks, you are looking at investing in a good company so that even if you had to hold on to the same, you would not be worried.
If not the best, because all of that would come at a price, ensure you surely buy a good location. An analogy can be drawn from our Golden rule number 1. while investing in stocks, you are looking at investing in a good company so that even if you had to hold on to the same, you would not be worried.
2. Risk of concentration:
Diversify, if you can, considering the price of each property could be significant, likewise could be loss or profit thereon, hence important to break down investments across cities, segments(residential/ commercial) and even sizes if possible.
Diversify, if you can, considering the price of each property could be significant, likewise could be loss or profit thereon, hence important to break down investments across cities, segments(residential/ commercial) and even sizes if possible.
3. Don't buy over priced assets, also avoid mediocre opportunities available cheap:
Like Warren Buffet says, “Its far better to buy a good company at a fair price, than a fair company at a wonderful price” I think this analogy just goes really well with real estate too.
Like Warren Buffet says, “Its far better to buy a good company at a fair price, than a fair company at a wonderful price” I think this analogy just goes really well with real estate too.
4. Don't overspend:
Don’t go overboard on your pre-decided budgets/ capacities. You do things when the opportunities come along. There could be periods together where you would have a bundle of ideas that come along, and then there could be periods where you would have long dry spells. In the words of Benjamin Disraeli, "The secret of success in life is for a man to be ready for his opportunity when it comes"
Don’t go overboard on your pre-decided budgets/ capacities. You do things when the opportunities come along. There could be periods together where you would have a bundle of ideas that come along, and then there could be periods where you would have long dry spells. In the words of Benjamin Disraeli, "The secret of success in life is for a man to be ready for his opportunity when it comes"
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