Property Investment Articles

Hi everyone Salena Kulkarni here from Phoenix Wealth group and in today’s short video I want to talk about the two opposing views of whether you should buy properties and hold them in for an indefinite period of time versus trading and making a profit as you go by buying and selling properties.

So there are two very strong camps within the world of property which advocates two things, one group of people believe in trading properties to generate chunks of wealth and chunks of cash as you go, the other group, advocate that you should buy an investment property and you should never sell under any circumstance.

What I would like to say is that there is some middle ground here and you could think of those two schools of thought as opposite ends of the spectrum, on one end there is constant trade, which obviously the pros and cons of that are you do earn chunks of cash along the way, but the downside is that you are going to incur enormous turnover cost and purchase cost associated with those sales, you could also argue that an advantage is that you are minimizing your risk and exposure in the market at any one time, because you are minimizing debt, but there is a whole raft of positives and negatives with that.

Now the advantages to that are that you can refinance, you can access your profits to some degree also you are not incurring those massive entry and exit fees on that property, and generally speaking, if you are in it for a long haul the idea is effectively that those properties should go up over time.

Now what I would say to you, is that there is a whole sort of multiple shades of gray that sit between those two schools of thought, as well my personal view is that you should be evaluating your portfolio on a regular basis and there is no right or wrong when it comes to real estate, but there are opportunity cost and preference.

So the thing to understand is by investing your dollar in a property over here, it may be preventing you from accessing other investments over here, if this is a solid investment and it is performing really well, then great, but if it is not performing having funds right up in that investment could actually be preventing you from investing elsewhere, where you could be making a whole lot of money, which is why I say, that the way you evaluate your portfolios by looking at the opportunity cost of what could otherwise be done with that money.

If you are interested in understanding or having your property portfolio evaluated, then please get in touch, something that I am really passionate about is that constant reflection and review when it comes to property and I hope to speak to you in the future.

Signing off,
Salena Kulkarni from Phoenix Wealth Group

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