Sunday, 28 February 2016

How to Invest in Uncertain Times

History has proven that in times of economic change and uncertainty there exists great opportunities... 

So how can you take advantage of these times?

First of all you need to find a way to ignore the negative fog created by the media. Although it seems inconceivable; they often write about subjects that they have not adequately researched. 

It is also important to remember that some people who predict doom and gloom in the media are just seeking attention. 

Give the media some thought but don’t rely solely on what you read or see on TV.

Secondly; you need to do your own research or find someone who can provide independent advice to help you find the right property for your circumstances. 

You need to look for someone who can look to the future to see what impact economic changes and other factors might have on particular locations.

One equalizer for all investors is that none of us can predict the future, but looking at what changes are known to be going to occur can be a good indicator of future property price movements. 
For example a closing of a factory can cause economic hardship in the surrounding area and property prices are likely to fall as people sell up and move away looking for new employment. Crime is also likely to increase in the area and this will result in a lower demand for properties making those properties on the market even harder to sell. 
Conversely an area where there is likely to be gentrification of an older suburb can result in higher demand and more than average price increases. These conditional changes can occur in both good time and in bad but there is more money to be made in times of uncertainty.
The above is one area where Investment Property Finders can help. We are independent and help you find the right property for your circumstances taking into account any known or impending changes.
Where are we today?
It just so happens that Australia is at a time when there seems to be a heightened degree of uncertainty. Our real estate prices have consistently appreciated for over 15 years. Yields are low, rental prices are stagnant and lending is tightening up. And the media continue to push this non-existent “boom or bust cycle” in residential property. (Australian property doesn’t “boom”, it grows either slowly or more rapidly and it has never experienced a “bust”, it simply slows down for a period. There is a well recognisable cycle, ask us for more detail.)
All of this leads us to uncertainty in property markets.
So there are some basic truths to remember…
Investing will always involve uncertainty…
At any point in the future, property values will increase, remain stagnant or go down. There are no other alternatives. Accept that that never changes.
At every point in history, you were just as uncertain as you are today about what the future holds. You might have felt more certain, having an opinion based on your perception of market conditions, but your feelings of certainty were an illusion. Good times follow bad and vice versa.
This is why investing involves risk, and therefore a corresponding return. Remember risk equals reward. When we accept this reality, we are in a position to identify the risks, and then proactively mitigate them.
But we can never completely remove the uncertainty.
Don’t let negativity paralyse you…
Over the past months, the media reports on the global economy have been quite bleak. China seems to be struggling, and financial markets around the world are flashing red, creating fear in the psyche of investors.
A recent poll concluded that one in five investors plan to do nothing in real estate for the next year. This situation creates opportunities for well informed investors.
But if you’re sitting this year out be sure you haven’t succumbed to irrational fear. There have only been a few times in history when the economic sky was actually falling.

Even during the Global Financial Crisis we had client grabbing bargains and make money.

Find creative solutions to boosting your income
Depending on your goals, strategy and your financial situation, the best use of your time if you are definitely not investing may be to focus on increasing your income.
Many investment experts emphasise the importance of creating a “Passive Income” that will fast track your progress toward financial freedom.

Passive Income(an income accelerator) adds to your income, but not on a pay per hour of work basis. Passive income is income you derive through leveraging, so you don’t need to trade your time for money.

It may involve starting an Internet business, harnessing your intellectual capital, trading options or even direct sales. In this new world of internet and the power of social media don’t completely discount network marketing without giving it a reasonable due diligence.
There are also certain types of property that will produce Passive Income.
Figuring out your income accelerator may be just as important as working out your property investing strategy, because the money you’ll bring in the door with your accelerator is what you’ll be taking out the door to buy properties.
We have some ideas you could consider here:
Focus on information and education
When situations of heightened uncertainty arise, the best defense is to increase your knowledge, skills and competency. That way, you’ll be able to recognise opportunities that already exist, avoid opportunities that are foolish, and take advantage of opportunities that arise when the market shifts in your favor.
In fact, seasons of heightened uncertainty often lead to the greatest opportunities, as long as you have positioned yourself well. On the other hand, if you’ve sat idle and inactive while waiting for your fears to pass, then you’re more likely to miss out or make a financial mistake.
Investment Property Finders are always happy to answer any questions that you might have on your path to successful property investment.

Good luck and we hope to hear from you…

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