Security is naturally one of the most important aspects that each investor is concerned with. And if done correctly, property is one of the most secure investments you can make.
Property can guard us against inflation. In many markets, property prices will invariably rise over time, though of course at different speeds and not all the time. But in the long run, they will rise (and more often than not in the short run, too). Plus, if you buy your property below market value, it adds even more to your advantage.
Property prices fluctuate much less than stock, commodity, or other prices. Over time, the value of your properties should increase and thus build up what we call equity (the difference between the value and liabilities such as mortgages against the properties). At the same time, equity gives you more time to react in a downtrend.
There is a constant demand for property as the population of this planet is continuously increasing and people need a place to live. The trend to urbanization has been running for centuries.
Putting all this together, you will understand why property is a secure form of investment. And don’t forget that during the time you are holding the property, you will also get a rental income that further enhances your returns and security of your investment.
Understanding why property is such a secure form of investment is the first step to overcoming the misconception that it is risky. While certain risks do exist, those can be managed. Remember that crossing a road is risky too, yet you do it every day. Important is to recognize and mitigate risks so we can reduce or eliminate them—for example, by looking in both directions before we cross the road.
You will most likely have heard that one of the most important aspects of selecting an investment property is its location. While that is true, there are many other factors to consider as well, so keep on reading.
One tip I can share with you is the continued rise of urbanization. You might want to look at investing in mid-size or big cities, especially those where the population is growing. Beach-front property might be worth looking at too, especially in or near cities. However, you probably want to avoid that beautiful country-side chalet or holiday home in a remote place.
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