Wars are fought and ended, recessions come and go, elections always dwindle around the corner, but one major battle which Is always being fought is that of the investors. With constant turbulence and almost every piece of news affecting the markets it is a real Lions game where only the bravest survive. For tycoons such as trump it has become another day in the office, throwing their chips around the poker table bullying all the little guys, but this does not mean you cannot grab a victory of your own. Like poker the aim is so simple, end the game with more chips than you started with!
Where do I start Investing?
We all have our own ideas of where to best start, some like property, others thrive in bonds, commodities and even art, whichever market you are interested in the first step is to find yourself a good consultancy. Now the universal issue with consultancies is they are all working on a commission basis, this opens up the possibility of being miss lead and sold some hopeless investment. However, there is a strong flip side to this, established consultancies work on a repeat business basis, meaning it is now in their interest to make you money so that you can keep coming back for more. We would always recommend going with a recommended investment consultancy firm, perhaps a friend or family member can send you a recommendation?
Once you have found yourself a good firm this is merely the very start of this long journey and the steps ahead is where many falter. In theory the whole process can take 1-2 days to confirming your investment with a deposit.
Each investment can obviously be different and all have pros and cons
The highest yielding properties are often off-plan as they are a cheaper investment to begin with as they have simply not been built.
Cash only deals as banks will not loan anything to property investors
Higher profit margins as you bought off plan
Steady cash-flow as they do not rely so much on massive market trends but rental yields
Easy to predict property rents and demand than it is to predict commodity and share prices
Shares can drop in a dramatic fashion, loosing you everything as they are far more susceptible to market crashes.
Will have to keep a daily eye on your investment to know when to pull out.
Quicker and easier to go stock market and buy shares.
Can make huge money in very short period with market jump.
These pros and cons are general and may not reflect every scenario, however smart investors play the game on a moving average basis and accept that they will never win them all, therefore labelling these pros and cons can work well for those with money to loose.
Now that you have decided what’s best for you It is time to decide on your exact investment. For argument sake let’s assume you are investing in property, your consultant will guide you through the locations, markets and exact developments, they should supply you with brochures, floor plans market statistics etc…
It’s now time for a reservation form, you fill out a form and get a solicitor on board. With your solicitor you will both agree to go ahead with the Investment and send the Res form along with a deposit, this is typically 5-10% of the overall amount. Property can range from anywhere as low as 25k to millions of pounds. The major potholes here will come from your solicitor, not always a bad thing as it is in their interest to make sure you are fully protected and may advise you not to sign until amendments have been made.
Your deposit is paid and now the full price is looming, this could be daunting for you as you face have a bill of 10s if not 100s of thousands of pounds coming your way! The first payment is put through to be paid in 28 days (typically) after your deposit. This will usually be around 50% of the full amount.
The final payment will obviously depend on the exact project. If for example you have purchased off plan, then the final payment will not usually be due until the project is built and you have a tangible investment. If you purchased a complete property then you may just need to pay up full amount much sooner, as you will be ready to start earning almost immediately.
The final step is the fun one, it is simply your steady income from the tenants, you can then re-sell your property for an instance profit, usually your consultancy will do all of this for you.
What about management, maintenance and renovations?
Again this can be dependent on your exact investment. Often you will be offered fully managed investments which are fully hands-off and you are merely a background character soaking up the profits, this is available for all types of property, most notably student accommodation. There is always the option of buying a derelict building and renovating it yourself and setting up management on all the facilities, whilst this could mean most better profit margins it can also mean bigger risks and could turn into a full time job.