Property Investment Tips

Free property investing tips

When it comes to investing in property, there is alot of information out there.  Some of it is quite expensive too.

Hey, I’m Darren and I am passionate about investing in property.  I created this site to share my experience, ideas and opinions with you.  I aim to give you free, relevant and useful tips that you can apply to building your property portfolio.

I don’t claim to be a property investment expert but I do know a thing or two, having 8+ years experience, and I am keen on learning more myself to further my own property portfolio.  So feel free to comment on my posts and challenge me!

Property investment need not be complicated, but it does have it’s risks.  Just like with any investment, you need to balance the amount of risk versus the potential return so that you are comfortable with your decision and able to see it through…

Short Term Versus Long Term

Short Term Property Investment

You can make money from buying property and holding it for the short term, but this will normally involve at least one of the following conditions:

  • Buying the property at less than market value (eg. a distressed sale, foreclosure or deceased estate)
  • Buying a property, renovating and then re-selling (commonly known as ‘flipping’)
  • Buying in a rapidly rising market and selling at the peak of the market (usually involves some luck or extraordinary market insights)

Short term property investment is a strategy that can make lots of money in a short period of time, but usually requires a higher appetite for risk and a solid implementation plan.  Even then, “short term” in the property market is usually a period of at least 6 to 12 months.

Long Term Property Investment

Holding property for the long term is a less risky way of growing your wealth, but it is also no guarantee that you will do well.

It is not unheard of for someone to buy an investment property and after 5 or more years it is still worth the same, or worse, dropped in value.  To someone who has taken a blind stab at buying this property, they will most likely be very nervous and want to cut their losses and sell.

But for someone who has done their research and can read the indicators that show the market is due for an upturn, then they will be confident of holding longer in anticipation of that fantastic gain that will make it all worth while.

Long term property investing usually involves some of the following conditions:

  • Choosing an area where demand is expected to exceed supply (eg. more jobs are being created in the area and therefore more people want to live closeby)
  • Holding and maintaining the property for at least 5 to 10 years
  • Keeping the property rented with reliable tenants to help cover expenses
  • Sometimes taking a net cash loss now, in return for potential capital gains in the future

So the strategy that you use for your property investing should be chosen based on your own investing personality.

If you see yourself as a “passive” investor, that is someone who is willing to sit back and watch their wealth grow without too much effort, then long term investing is better for you.

However, if you are more an “active” investor and have the extra time to renovate with a company like RSG Roofing LLC, develop or analyse the market closely, then the short term strategy may be more suited to you.

Having said that, some people will use both strategies and some will use one or the other.  The important thing is to decide which strategy you want to use upfront and try and follow it through for best results.

 



40 Responses to Property Investment Tips

  1. farfind says:

    Im glad I found this, I am thinking about going into the property business and this is a very helpful blog as I am pretty much a complete novice. The hardest part for me I think will be raising my initial capital
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  2. hot gossip says:

    “Buying the property at less than market value” it is defiently the most important thing,
    once you did, the profit will come.
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  3. Property investments are usually long term investments and they usually pay up. As for short term I personally know some people who made nice profit from re-selling properties that they have renovated. This sounds to me like best way to make short term profit on real estate market.

    • I definitely agree. Renovating a property or ‘flipping’ is a common method to earn substantial returns on your property investment as long as you know what you are doing and can renovate the right property yourself or do so at a low expense using contractors. Long term property investment is less risky but also needs the right ingredients such as location and timing. Both long term and short term require research and doing your homework. Thanks for your article. Very informative!
      Investment Property recently posted..Hello world!My Profile

  4. There’s just too much risk in short term investments right now to take on the risk unless you find the deal of the century. Buy smart, make sure you have the resources to hold for several years and it will pay off. Don’t put yourself in a position to have to sell a property after holding for only 2 or 3 years in a down market.

  5. Dr. Mercola says:

    I think that our economic climate right now is still too shaky for short-term investing. However, it will turnaround eventually, and your suggestions on short term vs. long term investment are great.

  6. I prefer investing in short-term property investments even if it is more risky. Remember that the higher the risk you take the higher the profit that you can get.

  7. Thanks for the investment tips. I will use them as I continue to invest in properties across the country.

  8. Your blog is greatly appreciated. I learned a lot about the risky and advantages of both short and long term investments. It’s really a good read.Thanks for the share.
    Teyona @ Real Estate Park City recently posted..146 Closings and 127 Under Contract In Park City The Last 30 DaysMy Profile

  9. Great article, very informative! Everyone is definitely more cautious about investing in property these days, so it is great to get some tips from the experts!

  10. Very good article. We have been seeing a lot of fix and flip scenarios here in Phoenix and I really believe it’s a win-win situation. The investor is getting a deal and making money while some of the “older” communities are getting a much needed facelift.
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  11. If you have extra cash, now is definitely the time to invest in the real estate market. With prices being so low, if you can hold your property for 5-10 years you can make some big bucks.

  12. Too much risk in this market for short-term property investments. Values are still falling in many areas and that good deal you thought snatched up could be under water before you know it.

  13. Rental Homes says:

    Hey Darren thanks for providing such an nice investment property tips.

  14. I think part of the problem with the amount of information about property investment online is that there is so much noise around the blogspace that you just don’t know what to think.

    It has taken me personally a long time to come up with an investment strategy.

    I believe (like a lot of others have commented) that at the moment short-term investments are too risky however there has never been a better time to build your portfolio if you have the available cash.

  15. Hi Darren, Thx for sharing your knowledge about real estate with all of us, property investment is the best option to invest nowdays, but we should also take care of the risk involved in the same.

  16. Thanks for the investment tips that’s very useful.

  17. I tell my clients that you can buy real estate for appreciation or buy inexpensive property for a higher yield (ROI). Many people that have a lot of cash are looking to buy real estate NOT because of the potential for return BUT for the income it generates.

  18. It is interesting. I always think of real estate as a long term investment. Or a two fold, when you are thinking rental income. You get the rental income while the mortgage pays for itself then after you pay off the mortgage you can sell the whole property.

  19. I am always interested in short-term investment because I love taking risks in investing my money.

  20. Investing in short term is equally important for small and big investors however, in my opinion, both have different intentions in short term investments. Small investors take small investment as their regular business while big investors take small investments as a small addition to their portfolio and to cover small business or operational expenses. Their main concern is their investments in big properties. Great article. Thanx

  21. Derek Morton says:

    That was a great analysis of the difference between long term and short term. To many of us have a tendency to want to go long term with short term ideas

  22. Excellent tips every investor should follow, whether it be long or short term. Thanks for the article!

  23. Real estate could be a very interesting long term investment. But I think we have to wait a few more years. The bubble isn’t over yet..

  24. Investing in foreign real estate can be great, but you really have to know the country’s laws, political climate, stability, etc. Do your homework!

  25. I don’t know about anyone else, but it seems like in my area the “short term” strategy is pretty much kaput. Metro Detroit values are in the tank (you have NO idea how bad it is unless you live here) and values continue to fall. 2014 will mark 10 YEARS of declining prices. Nobody even thinks that “maybe we’re at the bottom” anymore. Everyone has figured out that this is what has been causing people to continue to lose money trying to flip houses for the last decade. When values increase for a full four quarters in a row, then (and only then) might it make sense to think that we’re at the bottom.
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  26. We invested in Mexican property back around 2009 and it has gone OK. But you really need to find a local attorney to help work through everything. The system is different down there and you’ll need help navigating it.

  27. Suzanne G says:

    It definately risky but it helps if you educate yourself and research the neighborhood before you jump off the bridge. I also find that getting a mentor who is experienced in investment property makes things easier.

  28. Great site, I’m glad that you’re sharing your experience and ideas. The information you provide helps an experienced investor, to a novice. As for some of the comments, about real estate being risky, that’s like anything you invest in. But if you’re well informed, and are smart about it, either long or short term, real estate is great to invest in. Rates are low, many people are “having” to sell, which means lower and more competitive prices, and for multi family housing, now is an excellent time to invest. The amount of people renting is increasing, which is causing rental rates to go up. A savy investor can pick up a multi-family investment property at a low price, and reap the rewards of the rental income.

  29. logo items says:

    This is a good post! very informative. Thanks for sharing your knowledge. Keep it up!

  30. Hey Darren. I think a lot of people are scared right now to do a long term investment because the market crashed, but I don’t understand why. Prices are low and they aren’t always going to stay that way. Even if the market does dip again before it goes up, as long as the investor collects enough rent to make their mortgage payment, they will eventually get equity.

  31. Real estate is hardly ever a quick return unless you get very lucky. It is a long term investment and should always be viewed as that.

  32. Darren, this is very good advice that you have given. As someone who owns property in Manhattan for more than twenty years, I definitely fall in the “long-term” investment category. While it is true that if I was to sell in this down market, I would make money, a good portion of that would be lost to taxes. Still, I also realize that if I sell and buy a property in the same area, within the same market, it is really a good opportunity to do so because of the low interest rates. In the current economic situation, I would be trying to resist the “short-term” investment strategy, and only buy something I would be using personally, for business or as a residence. I know people who have the extra money to risk buying something, in order to rent out, and if I were them I would take the risk, if, and only if they can afford to carry the property on their own. Rentals are sky high these days, because loans are harder to come by, so I don’t think the risk is too great, but one must have the ability to fund the property/mortgage/carrying costs, etc., etc., just in case the renter defaults. I speak from personal experience on this matter, as I held onto a property for a short time while trying to get a renter out who wasn’t paying their monthly rent, on and off, for about six months. It was hell, but I know that even though I lost some money in the short term, when the market bounces back, I will get that money back.

  33. I want to get into property but find it very risky without a huge lump sum of cash lying around. It’s a game only the rich are able to play. Hopefully I can find a house priced lower then what it’s worth in the market, but that’s almost impossible to find as all the estate agents will just snap it up as soon as they come!

  34. Interesting comparison of short term investing vs Long term. I come from a real estate market where there are no
    huge increases in value. Just slow and steady rises. 2-3 % per year . It’s been that way for 16 years and seems it always will. Makes sense for long term guys in for the long run. Short term flips rarely work unless you get a steal! Great article.
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  35. Creating a successful property investment portfolio will always require a good knowledge of the property market, the location, and the current economic climate, so you should always find out as much as you can before buying a property. Thanks for the tips and information. :)
    Sell Home Now recently posted..Real Estate Team – Building Your Real Estate Investing TeamMy Profile

  36. The short term property investment involves risks for the profitability of the area will entail active participantion of the developer. If the developer is willing to invest time and money for the improvement of the facility, more likely it will entice more buyers. For long term property investment, patience is of the essence. Money grows but in a changing rate. To reap the results of hardwork, patience and proper management of the area is important.

  37. To quote the late Will Rodgers, “Don’t wait to buy real estate, buy real estate and wait.”

    Not a bad time to do so now.
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  38. If I talk about myself then I would like to invest in the property for the long term period because we can definitely make some huge profit if we invest for the long term. We cannot exactly analyze about our future profit if we invest for the short term period.

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