Property has long been a sound investment in turbulent times. ‘Bricks and mortar’ is a physical investment that you can touch and not a piece of paper that is in theory worth $X. There is no getting away from the fact that property prices can go down as well as up but over the long term and in a ‘normal’ economic cycle, overall, they rise at a rate far higher than inflation.
So, what are the advantages with investing in property? The first and most obvious advantage is that you have something that, in the worst-case scenario, you can live in. This may not be the ideal situation but could you imagine investing in an international bank, Lehman Brothers for instance? You may have had hundreds of thousands of dollars invested at the time of the crash in 2008, that depending on your particular investment, would now be worthless.
Had you chosen to invest the same amount in a property the chances are that your property may have appreciated in value (depending on when you purchased your property) whilst at the same time you would have had eight years’ rental income. The returns may at the time only have been in single figures per annum but this would have been a very safe and sensible long term investment.
The next advantage with investment property is that in current economic climate yields are often far higher than other investments. There are several reasons for this, firstly, there is a high demand for rental property around the world. This is because some first-time buyers are struggling to get on the housing ladder whilst at the same time there is an increase in demand for holiday rentals and lets. Higher demand, as is always the case with economics, leads to higher prices whilst at the same time higher demand also reduces the risk for landlords.
If we assume that risk is currently lower and investments in property, if all due diligence is carried out, is a low to medium risk investment it seems quite staggering that people are still considering other mediums of investment when returns of 10% are quite feasible. Now in Pattaya, Thailand, one well established developer is offering guaranteed returns of 10% p.a. up to maximum of 20 years. The developer who is offering this deal has been offering the same deal for nearly a decade and has paid in full, on time on every single occasion. The may not be an indicator for future returns but it is a good yardstick by which you can make a judgement.
Surely if you are looking to get an excellent return on your savings, investing in a property with guaranteed returns for 20% who be a very shrewd move? These returns are paid by the New Nordic Group each month into your nominated bank account in Thailand or overseas so the income in effect is a form of pension. At the present time, you would be well pressed to get a similar return on anything that was other than medium to high risk.