There are a great number of potential investment strategies available dependent on the property investors' objectives be it short, medium or long term, differing levels of complexity, as well as the investor's attitude to risk. This page provides information regarding the strategies available.
For illustrative purposes the two most common strategies are described below.
Medium term - (3-5 years (also known as a buy to let strategy or buy and hold strategy)
It is important to be clear what the investment is trying to achieve AND by when it must be achieved. In this way it helps focus the investment decision.
For example if the objective is to double the investment within 2 years then a Flip strategy would be favoured. Provided the investment has been chosen wisely it is more likely to produce the expected return than a buy and hold strategy in the chosen time period.
More experienced investors may start to look at portfolio investments across different areas or countries in order to spread the investment risk and achieve a more balanced return.
General Factors
In order to maximise the opportunity and therefore minimise the risk a number of general factors need to be taken into account:
The investment should be in an up and coming highly desirable area or country. The development plan for the area should be at least 5 years to ensure a good supply of investors. General construction levels should not be excessive, in order to avoid an oversupply in the market place and ensure lead times keep reducing for a sale and prices keep rising.
Economy
The economic condition of the country should be taken into account because a country or region that relies more heavily on tourism will be prepared to invest more into the infrastructure of the area to promote construction and tourism. The down side may be that too much planning consent may be allowed.
Political
The stability of the country is important. A consistent and stable political environment will lead to continual support of economic policies and investment, perhaps even encouraging foreign investment through tax advantages.
A constantly changing environment will at best lead to a de-stabilisation in the real estate market through uncertainty of economic support and at worst civil unrest.
Natural
Needless to say that in the investment is primarily for summer holiday makers then the climate needs to be warm and sunny. If the investment is primarily for skiers then good prolonged snow fall is needed.
Do not forget investments for businesses. Currently there are some emerging areas which have significant business attraction. For example, businesses looking to invest in an area by relocating production facilities due to lower labour costs etc. In these areas buy and hold strategies may be very rewarding.
Logistics
To be attractive the area must be easy to reach! Look out for new low cost airline routes, nearby airports, good road infrastructure.
