Are You a Budding Property Investor?

Mortgages & Money

There is a certain image of the typical property investor we see portrayed on TV and in the movies from time to time.

He (because it mostly often does appear to be a ‘he’), tends to swagger around a bit, suck on eye-wateringly expensive cigars and wear razor sharp suits which, unfortunately, tend to be too small for him.

Those of us in the property market know this fiction is just that – something very far from the truth. Granted the world of property investing can be extremely lucrative, but that doesn’t mean it is for everyone. We’re not all swanning off to the Bahamas for six months every year and for those who do make a mint, they don’t necessarily go around boasting about it, or showing off.

It takes all sorts to be a property investor

Many property investors are driven, to the extent they love what they do and hate taking any time off (these tend to be your small-profile buy to let landlords). Other investors are happy to dip their finger in now and then but leave most of the wheeling and dealing to others (our friends who invest in property shares).

What we’re trying to say in this article is that there’s not one type of personality who ventures into the property industry. It really does take all sorts. Where we can point out a distinction though, is in whether that individual is a high risk or a low risk investor. By ‘high risk’ we mean he or she having plenty of nerve to the extent they are prepared to go for deals others wouldn’t touch with a bargepole. Provided they have done their due diligence beforehand then this is the type of individual who will speed towards – and meet – their financial target in no time at all.

The low risk investor, on the other hand, is a cautious individual who tends to stick with a couple of buy to lets for years before investing in another property as much as a decade down the line. He or she obviously won’t make a mint overnight but they’ll be able to fall asleep when their head hits the pillow last thing at night.

Where do you reckon you fit in between the two categories outlined here?

Investing in the property market has consistently proven itself as one of the best ways in which an investor can generate wealth. The great thing about property is that it consistently increases in value over time and provides for an excellent retirement fund, as and when one looks to retire. You simply can not beat the property market as a method of growing your wealth.

High risk investor personality

Friends, family and colleagues love it when you turn up to a party because you’re always the ‘life and soul.’
You’re not a worrier. If you lost cash with a bad investment then so be it. As far as you’ve concerned our fortunes see-saw. You know your chance will come round again.
You’re spontaneous but also a little too impatient – much to the annoyance of friends and family.
You’re definitely a ‘go with your gut instinct’ type of person.
You’ll opt for hedge funds over emerging markets every time.

Low risk investor personality

You like to stand back at a party assessing everyone before you can even begin to relax. You don’t like letting folks down and can always be relied on to turn up to most events you get an invite for.
You’ll always opt for a diversification strategy rather than put all your money into one big investment.
Government bonds and deposit accounts is where your savings end up.
Your friends have mentioned you could do with ‘loosening up’ a bit more.
You may not be the quickest to make a decision over a property deal but when you do, you’ll never change your mind.

Most of us are probably somewhere in between both these two extremes and where we are on that continuum changes depending on how long we’ve been investing for and how successful our deals have been. Essentially though, confidence should come with every passing year.

The egalitarian nature of property investing

Perhaps the most impressive aspect of property investing – aside from the fortunes to be made – is the egalitarian nature of it. By that we mean you don’t actually need a lot of money to start out in the sector. Provided you have enough cash to put down a deposit for one buy to let you’re more or less off.

It’s how you act afterwards that dictates how the path before you will unfold. If you’re a high risk investor, for instance, and you manage to find a good mentor, you could be packing in your day job within a year or two. Now, truthfully, how does that sound?

FJP Investment have recently launched a hands-off property investment bond, managed by Empire Property Holdings.