adminthe science of juxtaposing the preferred outcome with the prevailing market fundamentals.
One may intend to hedge surplus business finance against inflation or other unforeseen variables and another may wish to take advantage of a not so common mortgage opportunity.
This in most cases result in uninformed property investing which may not fully provide the investor with the maximum return they could have achieved had more understanding of property investment been sought.
In these supposed times of uncertainty as to the general economic movements, uncertainty creates the best opportunities for short- and long-term investment as normally it results in the emergence of a buyer’s market.
The first half of the year witnessed a general lack of liquidity on the market resulting in a downturn in property movements causing many properties to be listed for longer than anticipated.
History has an unusual neck to repeat itself and it is trite in property investment that any downturn is followed by a boom. It is not negligent to predict a boom in our market as the next obvious occurrence given the current state of affairs.
The speculators among us may decide to predict a continuous downturn citing several variables which might prove correct but a serious investor knows the property cycle which follows every downturn.
This is not intended to fuel speculation, but ideally to limit the risk that may result in heavy losses.
It is true in business that high risk proffers high returns, however, a serious investor is better off specialising thereby limiting risk.
As property investment is a business on its own, when one specialises either in distressed properties, flats, area specific purchases, houses in need of renovations or building new, they inevitably lower the risk of losses suffered by non- specialised investors while at the same time developing an ability to forecast actual potential return.
It is critical to note that an area specific investor makes profit whether it’s a downturn or boom, buyers market or sellers.
When one specialises they begin to understand the areas that retain a strong investment value. These are the areas where most purchasers in the pricing bracket opt for. One will ascertain from such investigations that the demand for rental properties in such areas although critical in gauging return in long-term investments is not ideal method.
One may not be able to easily separate one method from the other, owner demand is the best method as it not only shortens listing time but it also ensures capital growth.
Specialisation allows one to be able to understand how far land in certain will appreciate and to what extent.
What factors may fuel its appreciation which may not at first glance be evident to the layperson. One may also become conversant with future area plans and available undeveloped space for future developments.
This creates a unique opportunity in investment terms as a result of an insider’s insight.
It is generally accepted that a lack of undeveloped space in an area results in the increase of value of the developed space. It offers a facade of demand.
The road to bad investments starts when the investor becomes the best mind on his investment team.
By this I’m not necessarily advocating for a big team on all property investments one may make.
This is neither affordable nor practical. I am, however, advocating for the kind of relationship that transforms your agent from a salesman to an advisor.
For what is critical is the advice aspect from an individual who is always on the property market
and is conversant with market trends.
Vengai Madzima is a property investment consultant and analyst with Wisdom Properties Real Estate. He can be contacted on 0772 468093 email: [email protected] Follow us on twitter@wisdomproperties_zw
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