Investment: How to make money in any market, part two - Jonty Crossick, Ready 2 Invest

How to make money in any market, part two

Jonty Crossick, with the second part of his masterclass in overseas property investment, give us five more top tips.

Read part one of Jonty's advice here

Recycling demand

High demand means growing house prices, so if you can predict where demand might occur then you will be able to capitalise on this most lucrative of price drivers.

Look for new transport links, infrastructure and investment. Or how about new leisure facilities, improving schools and relocating businesses? How about regeneration projects like the ones affecting the East End of London?

Planning proposals are available and widely discussed online these days so devoting a few man-hours can give you a head start and reap huge dividends.

Be aware of greed & fear

We might not like to admit it but we're all motivated by greed and fear, and both can affect our judgement when it comes to making sound investment decisions.

This isn't to say that emotions are bad we just need to be aware of their effects. Greed makes us invest in silly things and when we fail we often can't understand what went wrong. Fear stops us from jumping – even when an investment is sound.

The key is to stay calm. Look at things objectively. If something is making you wary about a deal, pinpoint what that is. You might not ever resolve what it is that makes you uncomfortable but at least by acknowledging it, you will be making an investment decision based on the whole picture.

Find your niche

Being good at property is all about finding what’s right for you. Over the last few years we’ve met all kinds of buyers. We’ve helped people find holiday-home investments on the Silver Coast of Portugal that earn money year-round from rentals and will give a good return when sold. We also have a large number of investors who look for hands-off deals like our land deal in Argentina. These investors want big returns and quick timeframes so they can move on to the next purchase quickly.

The key to both strategies is finding the right investment, in the right area, at the right time, that’s right for you.

We knew apartments in Manchester could be a smart buy-to-let purchase because of the amount of investment in industry, employment and education being pumped into the city but we still did our research to check out the neighbourhood and local demand. Pinpointing properties and areas that will hold their demand can make all the difference to your end returns.

Be realistic

The cardinal rule of investing is to always to remain in control of when you sell. Buyers can be blinded into overstretching their finances in the belief that the return outweighs the risk. But no one can ever know what the future holds for any market and by investing within your budget you will be able to ride out fluctuations, even if that takes several years.

If you’re forced to sell because you can’t afford the mortgage payments you could end up having to settle for a low price, even losing money on your investment. Or in the worst case you could face repossession. Don’t become a motivated seller. Markets do recover; you just need to make sure you can wait long enough to see that happen.

Add value

When markets get tough investors need to be creative, and value can be added to property in many ways. The most obvious (and popular) way is a quick paint job but you could increase your return by simply employing new rental agents and improving your yields.

Anything that makes an investment less risky or adds potential to a purchase will up your asking price. Why not consider adding planning permissions to a property or changing the usage of a building. Altering the layout to create a new room or by dividing a house into flats can be a costly renovation but can also add considerable value to a property.

Jonty Crossick

Jonty Crossick is a founder and Director of property investment company Ready2invest alongside his wife Alise. www.ready2invest.co.uk