Friday, June 3, 2011

Be A Contrarian

Be a contrarian investor of sorts.

Mortgage rates hit a new low this week and house prices are at their lowest in a decade or two, but still people are afraid to buy property. It's all but being handed to them on a plate, yet buyers are hesitant, behaving like abused animals who are now afraid of all investment.

I've been saying this all my life: although property is a serious commitment requiring patience and meticulous consideration it's the safest investment you can make. Buying my house, even at its slightly inflated price was the best purchase I've ever made because it's an investment I can control. If someone else manages your 401K, you're merely sitting on the sidelines watching it increase or decrease. You can buy property and immediately start making money on it. If I had bought that apartment in London instead of acquiring a pension, I would be a millionaire by now.

My pension is worth half of the original amount I invested, but my house is worth slightly more than the purchase price: a modest 6% after four years. I bought in an area popular with renters all year round. So, if I have trouble paying the mortgage I can rent it. I'm also able to grow food on my property. Of course, being a landlord is highly, and literally, taxing, so if you're not used to 24/7 job, then it's not for you!

Smart investments are very simple if you approach them as if you're literally at the market. Buy when the price is low and only sell when the price is high.

Don't follow the herd.

1 comment:

  1. Yes,it's true that investing is simple,but you have to see and then sell it,when price is rising.Well I feel it's a nice story and interesting too.