Choosing The Right Property And Investment Style

Out of the properties that you might find, which one(s) do you actually purchase? In short, the ones where the figures stack up.
To explain this further it is essential that you view your property investment as a business and not just some form of gambling, although the property market contains a number of elements of risk, as do most types of investment. Just like in any kind of business you need to know that you will be making money and not losing money, it is the bottom line that tells you if you are running a profitable business or not. However, there are at least two different high level categories of ways to profit from investment in property, these are explained here.
Investment Types
Capital Growth - Appreciation
This is the most common way that people think of earning money from property, usually because it is the property that they own and live in. This type of investment is the act of buying property for one price and selling it later on for a higher price, the difference is often referred to as Appreciation. This method of profit usually takes time over which the value of the property increases. However, you can add value to the property by doing some kind of work to it, like refurbishment or an extension. In other instances you may be lucky enough to buy something for less than it is worth and sell it the next day for market value thereby making a profit on the 'turn' or 'flip'. You will normally have to pay Capital Gains Tax on the increase of the property's value when you sell it.
Positive Cashflow - Income
This is the type of profit usually made by Landlords where the overheads of owning and letting a property are less than the income generated from same. What this means is that if you add up your mortgage payments, management fees and cost of repairs the total should be less, across the same period, as the rent paid by the Tenant. For example, if you pay out £500 per month on overheads, you would want to be letting the place out for at least £550 in order to make a profit, or Positive Cashflow. You will normally have to pay Income Tax on the profit made from rental.
The above two types of investment are not the only two and they are not necessarily mutually exclusive, that means it is possible to find a property that represents both types of investment. In fact most property will have some kind of appreciation, although there are areas that have had zero growth over the past few years and, indeed, some areas that have had negative growth, that means the value of property has actually dropped.
Similarly, Positive Cashflow is variable and can rise and fall with market conditions, you can only make your best, informed decision on the day, for the day, with all the available information. Historical trends may point towards a potential future, but this is not any kind of guarantee.

Selling Property in a Challenging Market

As the news stories about the woes of the property markets continue to pile up in the media, more people are tempted to put their homes on the market in the present climate to see if they are able to sell 'at the top of the curve' and take advantage of the capital gains they have made in the past years of the property bubble.
While experts disagree over the size of the market 'correction', or the length of any downturn in the market that is likely to take place over the next few months or even years, there is little doubt that more people will be in a position where they feel under pressure to sell their property as quickly as they can. The danger is that in putting your property up for sale you will be tempted into taking a much lower offer than you should, as well as the stress of dealing with demanding buyers.
On the other hand, being unrealistic about the value of your property, the motivation of your potential buyers, and the market conditions could lead to being stuck in a situation with a property that has been extensively marketed and still does not sell, despite discounts to the price.
Some of the situations you may encounter over this period of toughening market conditions are explored here, along with some possible strategies to help you sell your property at the right time and for the right value.
Be Objective - This is particularly important when you are selling your own home, rather than any kind of investment property, but it is vitally important that you are realistic and able to take the fact that agents or buyers may suggest you sell your property for less than you think it is worth.
This does not mean that you should just give in without a fight to the first offer that comes along, when you are convinced that the property is worth far more, but make sure your position is backed up with solid facts. In market conditions as they are at present, research in the local area is even more important, and can be the key to making your sale successful. Check estate agents' windows regularly to see what at price similar properties are on the market, as well as how quickly they move.
Also, try to compare your property to other similar ones for sale in the same area, and be as objective as you can. Essentially, these similar properties are your competition for buyers, and you need to know where your property stands in relation to them. Think about things like proximity to schools, shops and leisure facilities on the positive side, and main roads, traffic black spots and industry on the negative.
Knowing all of this, and listing where your property is stronger than most of the other similar properties on the market at the time, will allow you to price your property effectively and realistically, as well as helping in its marketing. The knowledge that your property has the best gardens of the type, or has an extension as a utility room should allow you to bring out the advantages in the details as supplied by the agent, as well as helping you to sell the property when you are conducting viewings.
Aggressive buyers and tactics - One of the biggest problems with selling with the current turbulent market conditions is that buyers will feel they are in a true 'buyer's market'. This means they will feel emboldened by the prospect of being more sought-after than the property they are considering buying. Given this fact, buyers are taking up some practices that have not been seen by vendors for a few years - some of which are just a shift in the landscape and relationship between buyer and seller, other which are a degree more unsavoury or even immoral.