Holding on to an investment property can be a truly traumatic experience. In a volatile, neurotic property market, it can be genuinely scary. In a falling market, it’s just grim. The truth about property investment is that it isn’t and never has been a "get rich quick" market. It’s a "get rich over time" market, and time is the key to holding investment properties.
It's possible to make good money in a short time with good property investments. On average, however, the time factor tends to extend. Some investments are better than others, and some perform much better than others in their markets. There are quite a few factors which affect property investment, but the key factor is the ability to hold properties to get a good return on your investments.
Holding a property
To hold a property means that you are able to maintain ownership of the property. Several factors, usually financial, can sabotage holding. Mortgages and costs can conflict; meaning your hold on the asset can be compromised simply by cashflow issues. The simple fact is that if you’re holding a property, you’re holding a significant asset which may need to be brought into play to deal with financial issues when times get tougher.
The rule, therefore, is to hold a property that you are certain you can hold without financial impacts in order to realize the best returns on that property. That can be a period of years and can involve multiple market scenarios, so this is no minor issue.
Holding a property is very like a business textbook exercise- That’s because to all intents and purposes, it is one:
Holding a property involves:
The result, predictably enough, is usually a loss, and occasionally a catastrophic loss. The usual cause is that the investor has over-extended their borrowing, or miscalculated the costs of holding the property. The end product can be a train wreck.
How to make absolutely sure you can hold a property
Everyone knows how to use a calculator, but everyone can also still get the wrong answers using them. You really don’t want to be guessing about your ability to hold a property. The best, and definitely the safest, option for investors is to get some professional help in their investment acquisitions.
Professional property investment advisors factor in the holding costs of acquisitions of property investments. They can also provide information about cost offsets, tax benefits, and other legitimate cost management options.
Talk to a professional property investment advisor, and you’ll get the information you need about holding your property. You’ll also get a priceless lesson in property investment management.
It's possible to make good money in a short time with good property investments. On average, however, the time factor tends to extend. Some investments are better than others, and some perform much better than others in their markets. There are quite a few factors which affect property investment, but the key factor is the ability to hold properties to get a good return on your investments.
Holding a property
To hold a property means that you are able to maintain ownership of the property. Several factors, usually financial, can sabotage holding. Mortgages and costs can conflict; meaning your hold on the asset can be compromised simply by cashflow issues. The simple fact is that if you’re holding a property, you’re holding a significant asset which may need to be brought into play to deal with financial issues when times get tougher.
The rule, therefore, is to hold a property that you are certain you can hold without financial impacts in order to realize the best returns on that property. That can be a period of years and can involve multiple market scenarios, so this is no minor issue.
Holding a property is very like a business textbook exercise- That’s because to all intents and purposes, it is one:
Holding a property involves:
- Being able to meet costs like bills and rates as they fall due
- Maintaining good control of the finances required to operate the asset
- Ability to service and maintain properties appropriately and in a timely way
- Full servicing of debt payment obligations
The result, predictably enough, is usually a loss, and occasionally a catastrophic loss. The usual cause is that the investor has over-extended their borrowing, or miscalculated the costs of holding the property. The end product can be a train wreck.
How to make absolutely sure you can hold a property
Everyone knows how to use a calculator, but everyone can also still get the wrong answers using them. You really don’t want to be guessing about your ability to hold a property. The best, and definitely the safest, option for investors is to get some professional help in their investment acquisitions.
Professional property investment advisors factor in the holding costs of acquisitions of property investments. They can also provide information about cost offsets, tax benefits, and other legitimate cost management options.
Talk to a professional property investment advisor, and you’ll get the information you need about holding your property. You’ll also get a priceless lesson in property investment management.
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