The rapid cooling of global economies and the credit crisis have made it more difficult for property investors to net large profits from the traditional buy-to-let and renovation models. Despite this, many industry insiders still insist that turning a profit in the property market is still quite possible. The methods are less conventional, but under the right circumstances, it can provide just as much security.
Some developers are willing to negotiate large discounts for off-plan properties. This form of investing is very speculative but can prove quite lucrative if the investor has done his or her homework. Other investors have found that turning commercial properties into residential properties can be quite profitable. This can be one of the riskiest forms of investment and is certainly one of the most research intensive. Local zoning laws must be considered before undertaking a renovation of this type. Still reeling from market slow downs, many developers have taken to making inflated claims of property values. This has led to many investors jumping into a situation wrought with troubles, most of them novices to real estate investment. Novice investors would be better off taking advantage of the knowledge and experience found in investment funds and real estate investment trusts. Caution is still needed, but a review of the fund's track record and future investment strategy will help.
In a cooling economy, there is no reason that property investment needs to be avoided. Investors just have to learn that there is more to earning a profit than buying-to-let or renovation. Simply buying plots of land can serve as a secure investment that may even carry with it a few tax benefits. No one investment strategy is the right one for everyone. Potential investors need to compare their investment expectations with their investment strategy.
It is also important to be adaptable. This is the reason investors are starting to take a step back from Asian markets. Overseas property investors from the US, Britain and parts of Europe are turning their attention back home after finding it harder to get financing in countries like Japan. Because of weak economies, prime property is going to be cheaper at 'home' instead of overseas and this can turn into incredible returns if held for just a few years.
