Here are 10 characteristics to look for in any investment - different property strategies tick most of them but I don't believe that any strategy ticks ALL of them:
> Strong and stable rates of capital appreciation
> Month on month net cash flow
> Liquidity – the ability to take money out by either selling or borrowing against the investment
> Easy management (and can be managed from anywhere via the internet).
> A hedge against inflation
> Tax efficient
> Long term high demand
> Not too much legislation and red tape
> Aligned with your personal values
> Risk to reward ratio meet individual's own risk threshold
I have created a little table* to give a graphic visualisation:
*Go easy on me please! This is my first attempt to create a comparison chart and obviously each category may have several sub-niches that cannot be represented and most answers will include "it depends on ... ".
Feel free to create your own comparison chart to add to the knowledge bank!
Remember to use the "Browse All Tribes" pink drawer to take a deeper dive down into each individual strategy.
It's very important to add that property investment is an investment where leverage can be used, unlike other asset classes.
Leverage is an investment strategy of using borrowed money—specifically, the use of various financial instruments or borrowed capital—to increase the potential return of an investment. (The rewards/returns should be greater than the cost of the borrowing, so it's vital to stack deals to see if they are financially viable). Leverage cannot be used in other investments like gold, shares, etc.
Property also delivers two forms of potential income - net cash flow month on month, and capital appreciation.