How to Buy Property in a Tough Market

It is no secret that property investment is one of the major keys to accumulating wealth

, especially in the Australian property market. It seems that almost every day the media highlights one success story after another of investors who have enjoyed spectacular gains through dealing in property.

The stock market and other investment strategies are also highlighted from time to time but the spectacular falls experienced by stock market investors are often enough to dissuade many investors from this form of investing and so most Australians settle into property investment as if it were a national pastime.

During the global financial crisis panic struck the hearts of investors throughout the world and even property investors were spooked by the spectacular decreases in asset values occurring in the United States and Europe. In Australia however, the market was largely immune to the falls experienced overseas and it became evident that the most prudent investment strategies that included a large proportion of property were the ones to weather the storm with comparatively little trouble.

However, one element of the global financial crisis that affected property investment was the squeeze on credit. In effect, lenders lost the flexibility of interbank lending and left to rely upon their own assets which meant that there was a substantial drop in the availability of credit to fund purchases in the property market. Even with lowering interest rates there were still insufficient funds available to suit most investor's plans and it is not surprising to discover that the property market stalled for several months.

The credit squeeze created quite a tough market but savvy investors who use the advice of their specialist property managers and finance brokers were still able to find ways through the maze and purchase properties at comparative bargain prices.

Those investors who had engaged the services of professional property investment advisers were, in the eyes of many lenders, in the best position to service a loan. It is for this reason they were given favourable treatment over this period and so, buying property in a tough market became a little easier.

This highlights the need for all investors to set up their strategy with professional assistance so that when the tough times come around again, as they inevitably will, they will be best placed to continue their strategy where other investors are forced to withdraw from the market. It is at these times when accumulation of wealth can be accelerated rather than retarded. Have the correct loan structures and cash flow buffers allows you to become wealthier, when others are panicking.

Remember, that 50% of the most successful investors in Australia have made their money through investing in property. Property worth $20,000 in 1975 is now worth close to $500,000. It is difficult to find any other investment that can match this rate of growth just by buying and holding.

The advantages of engaging the services of a property investment specialist are made clear when you examine these results in detail. Australians definitely have a love affair with bricks and mortar and when you understand the secrets and tax advantages of property investing you'll understand why.

How to Buy Property in a Tough Market

By: Sam Khalil

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