Things to Consider before Getting into the Property Business
Tuesday, September 15th, 2009Financial Investing is not something everyone takes seriously or really look into properly. This is because, it’s not something that we are taught properly in school and rather than take the time to learn and more importantly practice the subject properly, we rely on so called ‘experts’ or even worse family and friends that we think will be able to give us the best advice. There are many companies who deal with ground rents, typically, companies like Simarc have been around for many years and know the market well.
To most people, investing would include buying their own house, maybe even a second property, putting their money in a high interest savings account or putting money in mutual funds. These are things we are usually advised to do and in fairness there isn’t necessarily anything wrong with any of them. Some of them may in deed work out in your favour, but if you really take the time to acquire a little financial education, you’ll start to realise there are ‘vehicles’ that can be much more lucrative.
So what should you be investing in? And the simple answer is “Something that gives you an ‘ongoing’ return.” – This is how you define a ‘real’ Asset. Let me emphasize the term ‘ongoing’, you see many would have you believe that an Asset is usually a ‘long term’ investment that you will be able to sell on for profit or pass on to your family later on. Now, there’s nothing wrong with having that long term view in mind, but if the item in question is not giving you a regular and ongoing return (profit), it is not really an Asset to You.
Simple examples of such Assets would be a Business (Revenue), a Rental Property (Rental Income), a Stock (Dividends). – What may not be so simple however, to inexperienced investors at least, is that it must be giving you a regular ongoing profit i.e. more than breaking even. – Regular can mean; daily, weekly, monthly, quarterly or even annually.