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Property Investment Tips - Determining Which Market To Invest In

By: Michelle Bridwell

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There is so much choice when it comes to property investment that it can be hard to know where to start, or what to do for the best, as there are many more options than most people imagine.rnrnOf course, none of these is mutually exclusive! Many investors have a go at several types of property investment, in order to have a varied portfolio.rnrnAt one time, house prices may rise, and your own home becomes ridiculously valuable. At other times, prices may stick or plummet, and buy-to-let becomes a more attractive option.rnrnBuying overseas may sometimes make more sense than investing in the home country, and so on. Commercial property can also be a good bet for some people. rnrnIt is as well to note that the smart money always moves to where the best investments are at any one time, and when one type of investment has outlived its usefulness, moves on without sentiment or regret to the next up and coming opportunity. Smart money, for instance, would not have continued to invest in horses and carts once the motor car had been invented, but put money instead into the new horseless carriages.rnrnAlthough that may sound obvious with the beauty of hindsight, it has to be remembered that, at the time, many \'experts\' were predicting that the motor car would never catch on.rnrn As with all investments, the smart operator has to know when it is time to forget about one type of product and move on to the next.rnrnIn this article, we shall take a look at the main modern types of property investment, and briefly mention the pros and cons of each one.rnrnHere they are:rnrn1. Investing in your own homern2. Investing in buy-to-letrn3. Buying a second home or holiday cottagern4. Buying abroadrn5. Buying off-plan, either home or abroadrn6. Buying a wreck and doing it up (developing)rn7. Buying commercial propertyrn8. Buying a business such as a hotel or B&Brn9. Buying property to put into a SIPP or a REITrn10 Selling your main home and pocketing the proceedsrn11. Buying ground rents and freeholdsrn12. rnrnBuying at auction.rnrn1. Investing in your own homernrnWhat it is: You buy somewhere to live in yourself and it will be your main home, or principal private residence. However, you fully intend to use it as an investment or financial asset in that you will sit tight there until the market is at its peak, at which time you will sell and move on somewhere else. In other words, the primary consideration is always the investment potential, rather than a cosy home.rnrnHere, you obviously have to be fairly sure that the place you have chosen to live is a present or future \'hotspot\' and that it is likely to increase greatly in value during your residence there.rnrnPros: Because you are choosing a place as your main home, you are likely to take more care over it than when buying purely for investment, as with a buy-to-let or off-plan purchase, where you may be beguiled by sales talk and smart show homes. rnrnAlso, because the place is your own home, you will not be liable for capital gains tax when you sell.rnrnIf you are building a new home from scratch, you will also be able to claim VAT relief on the new build. But beware: this can be a high-risk strategy as you must not be seen by the taxman to be buying or self-building purely for profit.rnrnCons: You may be in danger of entering into a nomadic lifestyle, where you are constantly buying with an eye to future profit rather than looking for a nice place for you and your family to live. rnrnThis attitude can set in motion a rootless, temporary type of existence.rnrnAlso, although you are avoiding capital gains tax, it is expensive to keep moving. Every time you move, you will encounter legal fees, estate agents\' fees, stamp duty, removal costs and renovation costs, for instance. The furniture and fittings which suited your last place may not fit into the new home. A further point is that you will not be able to claim any tax relief on renovations or improvements, which you can do with investment properties and second homes.rnrnThere is also the temptation to renovate your own home to a far higher standard than you could hope to recoup on the open market. The trick is to renovate to just the right standard, and this is not always easy to determine.rnrnTo read about the other types of property investment, and tips on how to invest in property through vehicles like tax liens and tax lien certificates, check out MikesTaxLienTips.com.

Article Source: http://depositarticles.com/

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