Why invest in property?

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Liverpool and the Northwest
The Death of Newbuild
Media-led Property Hype
7 Reasons to Invest

Why invest in property?

Is it a good idea to invest in property, given the way the market has gone and all the panic and hysteria about the Credit Crunch and a Recession? 'Most people' will undoubtedly say no. But then again, 'most people' will never become wealthy, nor secure a comfortable retirement, nor will 'most people' ever have the courage to make a stand or
take a calculated risk. In this country, it seems to be party of the national psyche to put people down who take a risk, strive for something better - the entrepreneurs of this country. It is also part of the same mentality that is quick to point towards 'luck' as the reason for someone elses success.

I firmly believe we are missing a trick (and more than one) from the Americans, who have a sense of adventure, who see opportunity when others see doom and gloom, and who admire and aspire to the 'can-do', entrepreneurial spirit. Not that I am a great fan of Americans, but credit where it is due. The flip side of this is there are less entrepreneurs in the UK, and in many ways this is a good thing, as there is more opportunity and less competitors to take advantage.

I also strongly believe that in times of change, in times of turmoil and crisis, there is more opportunity than ever. The simple reason is human psychology. Most people are scared of change, and the natural reaction is to turn inward, protect what we have, shut up shop and ride the storm - take your pick of cliches, but you get the point.

The word 'crisis' is Chinese in origin and is a composite of Chinese characters meaning both 'danger' and 'opportunity'. Most people in crisis see the danger, but entrepreneurs instinctively think ' there must be some opportunity here'. I believe that 2009 will be remembered in 10 years time as a year of massive opportunity, the likes of which may not be seen again in our lifetime.

The prevailing logic regarding property investment (and almost all entrepreneurial activity, for that matter), which is almost entirely media-led, says that things are bad and getting worse, so lets all sit tight and wait for things to get better before we take any action. That is all well and good, but when things get better, everyone will be doing the same thing, and the moment of opportunity will have passed. Logical, isn't it?

When everyone else is wringing their hands and crying 'the end is nigh' - that to me is a wake-up call to look deeper. As the famous investor Warren Buffet famously said: "Be brave when others are fearful, and be fearful when others are brave". So when to buy? in my view its much better to buy when house prices are approaching the bottom of the cycle, and not try to second-guess when you have actually arrived at the bottom. Its fruitless anyway if you are looking to invest for 10-15 years, when you will undoubtedly have wished you had acted braver - after all, prices have always doubled every 7-10 years. And finally, 'at the bottom' is normally when everyone else starts to pile in. You will face streeper competition, and market forces will mean you will be able to command less of a discount - so the advantages will be negated. Its much simpler to to buy when everyone else has their head stuck in the sand...

Can you think of a time in the last century, point to it, and say: "I am SO glad i didn't invest in property THEN!" Time makes us all retrospective geniuses!

I think there is a very powerful and compelling case that there has probably never been a better time to invest in property than now - and throughout this section I hope to show you why I believe this.