Decide what the money is for
Property can serve several objectives and the right asset differs completely between them. Being honest about which one you are pursuing eliminates most of the market immediately.
- Income now: a tenanted commercial unit or a lettable residential property. Lower headline upside, something arriving every month.
- Capital over a long horizon: land or a developing area. Nothing in the meantime, and genuine uncertainty at the end.
- Use later: buying somewhere you intend to occupy in a few years. Judge it as a home you are buying early, not as an investment.
- Diversification: a smaller allocation where the question is what it does alongside your other assets, not what it returns alone.
The costs that erode a property return
Property returns are usually quoted gross and experienced net. The gap is wider than most first-time investors expect.
- Stamp duty and registration at purchase.
- Brokerage at both ends.
- Maintenance, society charges and lease rent throughout the holding period.
- Property tax.
- Void periods between tenants, which are a normal cost rather than an exception.
- Repairs and the cost of making a property ready to re-let.
- The time and attention it takes, which is real even when it is not invoiced.
- Illiquidity: an exit takes months, and a forced one costs more than it should.
What we can and cannot tell you
We can tell you what has recently transacted in an area, what comparable units are letting for, what the permitted use is, what the authority's published position is, and where we think the practical risks sit.
We cannot tell you what anything will be worth later. We do not publish projected returns, and we will not encourage anyone to commit more than they can comfortably leave invested. If that makes us less exciting than the alternative, we are comfortable with that.