Investment Property | Properties

What You’re Getting Yourself in To

As the prizes of goods swing and the stock market fluctuates, more and more people are finding investment property as a good business venture. This means that more and more people are buying land not to occupy it but for the purpose of securing capital gains or renting it out to others.

Investment Property: Why Go This Route?

As any book will tell you, land is an asset that does not depreciate. And as foreign markets are putting up more businesses in Asia, it is not a wonder that land has become a very precious commodity. In Singapore alone, appreciation rose at 31% last year. Moreover, properties for sale in the country continue to rise.     

However, reports are showing that this year, growth might be hindered by the downhill roll of the global market and by possible government interventions.

As more cities are becoming urbanized and as more urbanized cities are developing and getting more populated, several property listings are being converted into single family homes, lofts, duplexes, apartments complexes, condominiums, townhouses and even vacation houses for the labor forces of these growing cities. These house rentals are not getting any cheaper either especially when you’re talking about Singapore property.

Do not limit yourself to residential areas though, as more residential areas are being overshadowed by commercial buildings.

Now, if you’re willing to take the risk. Here are few things to consider in investment property:

 
1.      Make sure that the money you’re allotting for the property is in order. This is because investing on a property does not only mean paying for the land but also for repairs, maintenance, improvements and even surviving in between tenants.

    
2.      Get your numbers straight. There are a lot of factors to consider in ensuring that you are making a sound property investment. Your annual yield can help you analyze if the rent you collect in a year can make up for expenses. Property value is always a good thing to know just in case you’re thinking of selling the said property. Your monthly cash flow could be an important gauge in this decision.

 
3.      If you lack the experience, it might be a good idea to either hire a property manager who can help you take care of the details or pooling resources with known or trustworthy investment companies.

 
4.      Even with help, do your own research. It’s always a good idea to build a network of contacts. They can give you a better thought on the value of the property in a particular area. The right friends can alert you to coming foreclosures and sales. These people might even be able to help you acquire that elusive piece of fine real estate.

 
5.      And just like the TV series, keep in mind that a sound investment relies mostly on “location, location, location”. Prime investment property, though, does not come cheap. It will take a sharp eye, patience and a lot of bargaining to find a good buy at a good price.

Is it a wise investment?
Of course, this is not an easy question to answer especially since the market rises and falls several times a day. But is the place high maintenance in terms of the house and/or the landscape? If you have extra money or if the need arises, is there room for improvement? Is it located in an area that is being developed and bringing in investors or are the businesses around it about to or are already declaring bankruptcy?

Where is it located?
How far is it from schools and offices? Is there a local shop that is within walking distance or is at least a short drive away? If you or the tenant does not have a car, is public transportation nearby? What about recreational facilities such as playgrounds, parks and even malls? Is the neighborhood clean and safe or is it rundown and littered with unscrupulous characters?

What are its aesthetic properties?
Does the house have any points of interest such as a nice panoramic view of the ocean, the mountaintops or the city? Does it come with a swimming pool or a spacious backyard? Is the architecture unique in terms of exterior or interior design? Has the Singapore property been landscaped or does it have the potential to look attractive outside and/or inside?

How inhabitable is it?
Would the house require constant repairs? Is there enough space between neighbors for privacy? Can the area accommodate cars for owners, tenants and guests? How accessible is it? Does the house require residents and visitors to climb stairs?

How resilient is it?
Can it withstand any hail, storm or flood that might be native to that area? Can you imagine the area during spring, summer, fall and winter? Does the property get enough sunlight? Is there a fire escape? Not to get morbid, but does it have a basement, bomb shelter or panic room in case of emergencies?

It is always a good idea to have sufficient knowledge about the property market in that area when house or property hunting. When deciding, know where you stand and what your priorities are. Also, bear in mind that buying or investing in property is always a risk. If you take all this into consideration, then you are ready to look at those property listings again. Happy hunting!