The fear factor ...

Worrying about property prices?

Everywhere you look these days there are reasons NOT to invest in property. The uncertainty in the market, the lack of lending by the banks, the vagaries of housing valuations, the reduction in available finance. Over the years I have read various articles shunning the idea of property investment - 'Property values about to plummet'; 'Investors fear the impact of interest rate rises'; 'Property investors selling up due to crash fears' etc etc. Most of those stories often coming from a weekly journal I long gave up on - Money Week.

Even last week, I saw the headline from Money Week -

'How far could house prices fall in 2013?'

One of the great aspects to investing in property - if done wisely- is how it can shield your money from the roller coaster ride of the money markets. When the market is in a slump, property prices tend to be lower, interest rates are also usually on the lower side, and it is what is known as a 'buyer's market' - in other words, you can find a bargain! When the market is on a high, prices are higher, as may be interest rates, but finance is easier to come by and of course, you may find that quite quickly your property has increased in value, unlike in a slump where it may take years to grow in value.

Both of these scenarios offer hope to the property investor - on the one side, you will have tenant demand from those who cannot get a mortgage and cannot afford the deposit, and on the other, you may have to work harder to find tenants, but the property itself is growing faster in value.

Guess which side of the market we are experiencing right now? Yep, you guessed it, the slump. Me on a Friday night. After a week of kids, hubbie, cooking, work, thinking and emails. But there are some rather nice aspects to being in a slump if you can overcome your fear of the unknown. Apart from a large glass of red that is. 

For example, there is a sense of opportunity and bargain hunting. If, like me, you LOVE a bargain, then this is the time for you to seriously consider buying property. Prices may still fluctuate over the next few years and they may reduce further, but you will probably have bought more or less at the bottom of the market, so things can only improve long term. The benefit is that you should be able to rent out your property for a reasonable sum and make a little extra per month as mortgage interest rates are so low. 

Don't expect to see massive capital growth though, unless you are buying in a hotspot (like London's East End for example). Buying now should be part of a plan for long-term financial benefit - not a get rich quick scheme. If you are serious about buying property for investment and want to grow a portfolio that can give you long-term financial freedom then being able to ride the storms of the markets is an absolute necessity.  Emotional intelligence, strength, and determination, count more in the end than interest rates, property deals, or bargains.  Overcoming fear is one of the biggest challenges to anyone investing in property, and is something which you face regularly whether the market is boom or bust. There are huge gains to be had from property - felling the fear and doing it anyway is just one!