You, on a gondola in the middle of the Grand Canal in Venice, taking a holiday with your family for the first time in years.
You, returning home to a house that is recently renovated, with brand new floorboards and the deck that you have always wanted.
You, laughing all the way to the bank when it is time to sell your house.
Like the sound of that? Read on for more advice from Eric Wong, founder of Zikira Properties.
Is it better to invest in property than not at all?
That’s the big question, isn’t it?
What I’m about to say will seem to be at odds with my career, but I’ve always believed in telling the truth and giving my honest opinion; and the truth is that most people are better off investing in something other than property.
Property investment is fickle and very unpredictable, capable of subjecting investors to abrupt changes. As human beings, we like to think that we know more than we actually do, but the housing market is not something that can be foretold.
While an interesting strategy to lock in profit for shares is to sell half of them when it doubles (so that the shares are essentially free), you can’t exactly sell half a property. You might be able to refinance, but with leverage, the holding cost will just escalate.
Weird hearing all that from a real estate agent, isn’t it?
This is, of course, not at all to say that learning about property development and investment is always a negative – with much experience, research, and risk, it can be done right and turn out to be very financially rewarding.
For those who don’t have as much property experience or economic freedom to take such risks though, my solution is this:
invest in your own home.
To me, it’s one of the more sensible options since I’m a firm advocate for ignoring what’s out of your hands, and focusing on things you can control. Stop stressing about which area is the next hot spot as it is out of your control, and start doing something about the things you can.
Spend your money on renovation instead and you can wake up every day in a house that feels like home. You get the study and ensuite bathroom that you have pictured for years now, a brand new kitchen, and a playroom for the kids.
Even if you’re cash poor but still working, you can refinance due to paper capital gains over the years and go on a holiday using the cash, then let the builders do their job while you walk the Great Wall, or take photos with the family under the Eiffel Tower.
When you sell, your renovated home will stand out on the market against nearby houses that have yet to be touched up (since their owners have been too busy investing in other properties), giving you ammunition to smash the suburb record.