Money is a tricky thing. They say that it can’t buy happiness, but it can probably get you a reasonable approximation. It can buy us things and experiences that bring us joy whether that’s holidays in the sun at home and overseas, a car that brings us freedom, luxury, and prestige and presents under the tree every year that help to give our kids experiences they’ll always remember. They say that money makes the world go round and while it’s no substitute for the things in life that really matter like a fulfilling career, the love of someone you genuinely care about and a family to adore, there’s no denying that it can make your life a whole lot easier. No matter how much of it we have… We could almost always use a little more. In a capricious economy and with the cost of living higher than ever it’s no longer enough just to work hard anymore. We need to start making our money work for us. If you’ve had money in savings for a long time, you likely know how frustrating it can be to try and make your money grow with a conventional savings account. High street banks, in particular, offer particularly anemic interest rates that can be extremely frustrating. Online savings accounts can be slightly better, but even the best of them are unlikely to grow your money in any meaningful way.Image creditSo, where do you we turn?Stocks and shares can be a real rollercoaster, and even if you research your every trade tirelessly, there are so many factors influencing the value of your shares that you may not even be aware of that you could lose everything through no fault of your own. Then, of course, there’s Bitcoin… Hmmm… probably best to steer clear of the whole cryptocurrency thing altogether if you’re not that big on risk. Nope, the safest way to grow your money is still property. But of course, if becoming a property magnate were easy… Everyone would be doing it. Property investment still carries with it some risk, but it can generate reliably high yields which will help you to grow your money sustainably and be able to give your children the things in life that they deserve.Just remember, there’s no such thing as passive incomeIf you will be buying and letting out property, you may have heard this referred to as passive income… But this is a flagrantly unfair misnomer. There’s nothing passive about being a landlord, which is exactly what you’ll be. If people will be living in your property, you have a legal responsibility to make sure that it’s safe and inhabitable. This means that you’ll need to be fairly handy or at least have access to someone handy to manage the day to day maintenance of the property. Of course, you could go through a letting agency to handle this, but be aware that this will eat into the profit margin of your rental income. Have a focused investment strategyIf you’ve decided to commit to the world of property, it’s important to go in with a strategy. Not every property is a great investment, or at least may not be a great investment for you. Buy a property indiscriminately, and you’re likely to make a loss on your investment. If you’re only looking to invest in one or two properties, then this may not be the end of the world, but if you intend to build a portfolio, it could be a recipe for disaster. To devise a strategy you simply need to ask yourself what you want to do with your property. Do you want to buy properties in need of renovation, do them up to increase their rental value and let them out? This is a nice stable model for investment but may take time to generate any sizeable yield. Or do you want to flip properties, buying properties, making a few renovations and selling them on at a profit? This could generate huge lumps sums for you, but your property could take a while to shift, and you’d be at the mercy of the market.You’ll be a better investor once you’ve decided on the type of investment that works best for you and hones your knowledge of the market by reading, researching and attending seminars that specialize in your chosen area. Diversify your locationsJust as stock market magnates keep a diverse stock portfolio to insulate themselves from risk while still enjoying a substantial dividend, so too must would be property moguls consider a range of properties at home and / or abroad in order to create the perfect balance between risk and yield. Different types of properties have their own advantages and disadvantages. Investing overseas can generate a high yield, especially if you buy in a desirable holiday spot. Likewise, city center apartments are always desirable and easy to fill but tend to come at a higher upfront cost with potentially extortionate maintenance fees for the building.
If you’re looking at buying property abroad, the following are all great locations;
- Indonesia- Indonesia is on the up. It’s a thriving industrial hub with significant tourism. It’s Southeast Asia’s largest and most populous country and has for huge economic growth. Nonetheless, property is still affordable making it the perfect time to grab a bargain
- Malaysia- Malaysia is another country that offers steady economic growth but still has properties that are affordable and desirable for investors. The buy house in Malaysia procedure is relatively straightforward. Plus there are lots of helpful English speaking realtors who can help facilitate the transaction.
- Italy- Despite the enormous demand for property, Italy has always been one of the best buys in Europe. In the picturesque holiday resort town of Abruzzo, for example, you can expect to find a decent fixer-upper for less than $35,000.
But… Be prepared to cut your lossesThere’s no valour in sticking by a dud investment and it takes real self awareness to know when your money spinner has become a money pit. It may wound your pride but ditching a property that refuses to make money for you can keep you from missing out on other, better opportunities even if it means you take a loss. Success in property is all about the long game, after all.