Many investors see property investment as an attractive
and potentially rewarding component to a portfolio.
While some take a more optimistic or pessimistic view,
this seems to sum up the mainstream at present. But
it looks like the nature of property investment as
we currently know it could be set for change. What
does the future hold for this popular asset class?
factor frequently cited by those who do take a dimmer
view of property investment is the amount of work
involved. Full-service property investments (also
known as end-to-end property investment) are increasingly
being used, especially by high net worth individuals,
as a way to conquer this while still adding property
exposure to their portfolios.
the comparatively labour-intensive nature of managing
properties is in evidence throughout the process.
Buying a property is relatively slow-going and involved.
During the time you hold the asset, it will need repair,
maintenance and, potentially, improvement. When you
come to sell, you return to the same lengthy process
as you encountered when buying.
management property investments aim to eliminate this
problem for the investor and make property as accessible
as most other assets. From the purchase process to
resale, through all the maintenance and administration
in between, they will handle the property investment
for the investor. The investor, meanwhile, still gets
to keep an attractively large portion of the returns,
and in some cases can enjoy up to 70% capital appreciation
over just three years.
markets are currently particularly attractive for
this kind of investment. Properties
in the UK, London and Manchester have been identified
as stand-out markets. Internationally, the Australian
markets of Sydney, Melbourne and Brisbane and the
US cities of Miami, Chicago, New York and Seattle
are all good examples. Not only do these urban locations
offer healthy property markets forecast for significant
growth in coming years, but they also offer significant
areas of redevelopment.
last factor is important, because areas of redevelopment
are of particular interest to full service property
investments. Investment companies generally buy properties
in bulk at the early stages of development, for example
a whole floor of apartments. Through a mixture of
early investment, economies of scale and, often, established
relationships with developers, this allows individual
units to be purchased at impressively low prices.
This can help maximise returns for investors despite
the use of a third party for complete management of
management property investment also tends to be fairly
flexible, giving investors the potential for quick
returns or the opportunity to follow the long-term
tactics that usually underpin property development.
If they want to simply proceed with letting the property
upon completion, the investment company will fully
manage the process and allowed this to be carried
out with very minimal effort. If values have risen
significantly during the construction process and
the investor wants to seize the opportunity, there
will usually be options to sell instead.
full management services expected to grow significantly
in popularity, it may be that in the future property
investment is no longer seen as labour-intensive at