Investing in property is similiar to other forms of investment you have to do your homework first, weigh your risks, understand the market, do your calculations then make your move, and plan your exit strategy. But property investing is a little bit more than that. Many property investors may not start off as investors initially. Many started off with buying a property that they were going to live in, but moved away because of various reasons. Although these amateur property investors may just own only 1-2 properties, it was definitely not easy to get to where they are.

If you are serious in investing in property and looking at earning a tidy sum at the end of it all, read on.

As in all normal investments you’ll have to go ‘long’. What that means is that you will have to buy in at a specified price, and then selling it at a later time to earn a profit. In such investments it is always important to ensure that you buy low or buy in when the intrinsic value of the asset has not been fully realised. What the latter means is that, the property has intrinsic value that many others had overlooked or unable to wait for the full value to be realised. Some of the larger property players buy land for development, for pure plays, these companies or individuals are property developers or construction company owners who are able to add value to the land and thereby eventually selling it for a heafty profit at the end.

Although this seems very attractive, it is a risky business, and in Singapore, such plays are limited to a selected group of companies, mostly listed property development firms and some medium sized construction companies.

The mass market property investor is left with a few but still attractive options.

1. Buying in at launch or pre-launch period of a new property development

2. Buying a property in a poorly maintained condition and refurbish and retrofit the property

3. Buying any property that has the potential for future collective sales and wait out for the collective sale to happen

4. Buying a property that has a high future value becuase of its proximity to amenities etc.

5. Buying a property that has a high yield

All the 5 options listed above applies fairly well to both residential as well as commercial properties.

The time frame of when to enter the market depends on numerous factors such as:

1. prevailing interest rate environment

2. overall economic performance of the country

3. Your own financial position and cash flow situation

4. Global economic factors and economic cycles

In a bad property market, there are many opportunities to pick and choose quality investment property. These are often foreclosed properties by the lenders and sold by auction. These properties are what I like to term as “property in distress”. What this means is that this property can be purchased below market value either because of much needed refurbishment or because the seller is in financial difficulty and must sell quickly.

In a normal person’s life, they will have about 3-5 such opportunities to make good property investments based on the 10-year economic cycles. This general rule of thumb is overruled if money is not an issue (especially for people like Donald Trump). But as most people have limited access to capital funds for such investment, do plan it well, and you are bound to reap the benefits of your investment.