Interested in adding property to your investment portfolio? Here are a few things to keep in mind before you do.
1.Owning property puts you in control
If you want to invest in property, there are plenty of listed options available. But owning your own property gives you more control of your investment. If you’re looking for a carefully selected investment property in a high-growth international market, with seamless process management, it may be better to consult a specialist like Carrick Property.
2. Local is lekker, but global is better
South Africa has a wide range of property options which provide superb diversification options. But your investment portfolio most likely has a lot of local exposure (including property), so it makes sense to diversify offshore. “There are indeed good opportunities in South Africa,” says Bradd Bendall, Group Sales Director at Carrick Wealth. “However, from a pure investment perspective we would suggest that investors hedge their bets and look at offshore properties in First World economies.”
3.Location, location, location
Remember the old adage about the three most important considerations when it comes to buying property? That’s especially true in the global market. Carrick Property has identified promising opportunities in countries like the UK, Germany, Portugal and Mauritius, carefully picking the best to reduce clients’ risk.
4. Going global isn’t impossible
If finding, buying, financing and managing an international property portfolio seems like a massive undertaking, that’s because it is. That’s why it makes sense to engage the services of a proven, experienced and qualified property investment consultant. They’ll guide you through the paperwork and the red tape, helping you make decisions that will help you grow your wealth safely and securely.
5.It’s a long game
Property investments came under huge pressure during the COVID-19 crisis, and while commercial property suffered far more than residential property, many investors remain wary. But as Bendall points out, “Property remains a solid asset class, and given the challenges of 2020 it has outperformed many of its competitors. It is, however, important to remember that property is a long–term investment.”
6.Now’s the time to start
Property’s biggest downside is its lack of liquidity… most of the time. But in tough times it’s also its biggest strength, because there is not the volatility that you see in more liquid markets like stocks and shares. The Covid-19 crisis has also brought opportunities, especially with lowered interest rates which means your cost of finance is less, and that drives up the overall return on your investment.
7. Do your homework
Bendall warns that the biggest mistake property investors make is that they don’t do sufficient research when investing in property. This, he says, results in below–average returns. “When investing in offshore property, ensure you work with trusted organisations who are able to hold your hand throughout the process and beyond,” he says.