REASON FOR INVESTING IN PROPERTY:

Despite the diverse profile of property investors, by far and away the most common reason for investing (66%) was to provide a secure long-term investment, with investment income being the next reason.

Purchasing property ("bricks and mortar") has always been a sound investment strategy, and with the current rate of Exchange for the Thai Baht, and the resurgent Thai economy and tourist markets, buying a property in Thailand is certainly an option worth considering. Good quality rental properties are currently enjoying 10% to 12% returns.

Statistics indicate that over the long term, both share markets and property markets tend to show substantial increases in value and both can be excellent investments. Individual stocks and properties can significantly out (or under) perform market averages. Selection of the right stock or property (in the right place at the right time) is therefore the key to successful investment. Good information and sound advice is fundamental to this investment decision- so it is always wise to speak to your Real Estate Agent before proceeding.

Investment in a property (without debt) is an investment in real assets ("bricks & mortar") that will always exist in a substantially unchanged form and be able to be put to very much the same use as originally intended (or even an entirely new one) irrespective of it's market value. As someone once said; "buy land, it's the only thing they aren't making any more of". Stocks on the other hand, are very much intangible interests (even where the underlying company has real assets) in a business that can potentially fail and become bankrupt and completely valueless.

PLANING TO INVEST IN PROPERTY:

Buying real estate, whether you are buying the family home or an investment, is one of life's most important financial decisions. However, in buying an investment property, it is wise to remember that you are making a business decision. You are not buying from the heart but from the head. You are buying the property because you expect it to appreciate in value. Common mistakes made in investing are that people look for the same things they would want in a home or buy in their local area so they can 'keep an eye on it'.

In searching for a residential investment property it is important to consider three things:

• Look for a consistent streetscape. A mixture of conflicting building styles lowers the desirability of the street.
• The property should be located within easy walking distance of all amenities.
• The street should have potential.

As a business and financial investment decision, it is important to make your purchase in a methodical way:

• Assess your financial position,
• Decide on your strategy,
• Assess the financial viability of the investment,
• Negotiate effectively,
• Obtain legal advice, and
• Obtain professional property management services.  

ASSESS YOUR FINANCIAL POSTION:

When investing it is important to assess your current financial position. What are your cash reserves and what equity do you have in your present home? Look at your long term objectives, for example, will the property be part of your retirement financial plan?

Potential changes to your current situation should also be factored in such as the birth of a child or the loss of one income. It is wise to seek advice from an investment adviser or qualified financial planner to help determine goals and strategies.

DECIDE ON YOUR STRATEGY:

Some properties provide good rental returns but have little potential for capital growth; for some the converse is true. It is more difficult to find the ideal of high yield and high appreciation potential.

It is important decide on your strategy before you start you search.

ASSESS THE VIABILITY OF THR INVESTMENT:

You should try to assess the soundness of your investment. Study the capital growth history and the potential rental income. If you are familiar with computer spreadsheets, try to analyse the impact of an interest rate change or a potential vacancy period.

NEGOTIATE EFFECTIVELY:

Professional negotiation can help ensure that you do not pay too much for a desirable property. Negotiation can also include structuring a contract to allow items favourable to the purchaser such as access or installation of tenants.

OBTAIN LEGAL ADVICE:

Sound legal advice will ensure that the contract is fully examined and approved and that any changes are allowable. A good lawyer should be an integral part of your investment strategy.

PROPERTY MANAGEMENT SERVICE:

Professional property management frees you from dealing with tenant issues and gives you more time to concentrate on your portfolio. Your property manager is better suited to negotiate on your behalf should the need arise. He is also in a position to obtain credit checks on potential tenants and has access to trades people. If you prefer not to meet your tenants then a managing real estate agent is definitely recommended.

nvesting in Property