Investment Property - How to Protect your Investment Against Falling Prices

by Sacha Tarkovsky - Date: 2007-01-19 - Word Count: 455 Share This!

If you are investing in property or are looking to then you want to see your assets rise in value.

The problem is that many people are going to lose on their property investments unless they take action now, as property prices fall and could fall a long way from current levels.

Don't listen to the estate agents and optimists prices look set to crash further

With interest rates up, people are starter mortgages shifting to higher rates, a glut of empty building and people already sitting on loses and you the complete recipe for big falls.

Its not all bad news though! You can still protect the value of your investment or any other property you have.

Here is the action you can take to hold the value of your investment property and make some money as well.

1. Lock in the value of your property at current levels

There are companies who will for a small fee lock in the value of your property at current levels so that if prices fall you do not lose out.

You have effectively locked in your current value and if prices fall further you are covered as you can sell at the lock in price.

In a booming market with prices rising or if you are a homeowner not intending to move then the above is not attractive but if you have investment property and need to protect value then these schemes offer peace of mind and excellent value for money.

For a small premium you're protected against crashing prices and the companies who offer these schemes offer highly competitive premiums.

If prices fall you can sell a property and buy and equivalent one at a lower price and make a profit or hold and know your value is locked in.

Other ways to protect include:

2. Diversity

Buy in different areas to spread your risk and consider overseas property investment.

For example, many overseas markets are booming particularly Central America where Costa Rica has been and continues to give 30% annual returns or more.

Property is cheap, it's only 2 hours away and investment property here offers lucrative rental returns as well as capital growth.

Throw in easy purchasing, low property tax and a friendly safe country and its no wonder it's a favorite destination for Americans and other foreign nationals

3. Improve

Improvements to investment property should always increase the value more than the improvement costs themselves.

Having an on going improvement scheme is good as you will constantly be improving the value for less than the cost.

So there you have it 3 ways to protect and make money on your investment properties that will all ensure that as prices keep falling you be able to weather the storm.

Related Tags: real estate investment, protection, overseas property, investment property, isuring property value


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