Should we invest in properties now?
Penny had this question asked the other day “Is it a good time to invest in properties?” And I have replied this question with a resounding “YES!”
But then again, where property investment is concerned, investing now or later is still good. The old saying of “Location, location, location” still holds true no matter how it is spinned.
Some people may ask why properties? Why not invest in something safer like fixed deposits (FDs)? The risks seem to be so huge.
True, property investing is a risky thing and is not meant for the faint hearted. But which investment doesn’t come with its share of risks right?
Property investing has one big advantage to my mind and that is as a hedge against inflation. Prices of goods and services go up every day and this includes prices of properties. So why do we want to wait for tomorrow where prices will rise again? Granted, the location has to be right. Once that is set, your wealth through property investment can grow exponentially.
But even if your location is “wrong”, the fact remains that land is a limited resource and it is a matter of time before this “wrong” investment bears fruits for you. If it was a “disastrous” investment, then maybe your next generation will see the fruits of it.
Apart from location, the time horizon of which this property is held is important. One should never treat it like the stock market and start flipping the properties. The charges and fees involved is just too much to realistically make money out of it, not to mention the hassles of it.
Investing in properties now under the current gloom condition seems to be good since we are catching it at a lower level than it was, say, 3 years ago. Buying now and holding on to it till the next cycle peak will no doubt yield us good returns. But of course, some will say – what if prices plunge tomorrow? Then ….
The other factor in deciding if we should invest in properties now is your personality. Are you one who have the nerves of steel and strongly believe that the economy will recover eventually? If yes, then you should take advantage of the current low rates and invest. If no, then maybe property investment is not your game and you should stay out.
Whatever it is, I really think that property investment is a good way to build one’s wealth. Just observe all the big tycoons, property investments almost always form a part of their portfolio.
What do you think? Should we invest in properties now?
