The property market is constantly changing. You must be up to date if you want to progress. Try to keep significantly ahead, or you risk falling seriously behind.
If you want to stay one step in front of your competitors, consider these four trends that you need to keep your eye on. Pay attention to emerging markets and new tech, as well as local politics. There is also value in marketing to younger generations.
Diversify your portfolio
If your portfolio only has one type of property in one location, you are not doing enough. You are at risk.
Many investors and entrepreneurs have diverse portfolios, such as Andrew Dixon, James Caan or even Elon Musk. They have do not invested heavily in one sector, but instead have interests across industries. Many investors are avoiding retail property in the UK, but there are other trends that you need to follow.
Don’t invest in property in megacities. London, Paris, and New York offer no return for your money. The property values in some of these cities, like Hong Kong, are even falling due to political instability and the Coronavirus outbreak. Look outside of traditional “safe bets”.
Consider instead cities experiencing serious growth, like Kuala Lumpur or Cape Town. You will get more for your money. See a return on investment not just this year, but in every following year for the foreseeable future. Also think about smaller European cities like Vilnius, which is experiencing growth from an expanding tech scene.
Think globally. If you diversify your investment portfolio, you won’t be hit hard by political instability or falling property values in any one country.
Keep your eye on politics. As an investor, this is make or break for you. Local council elections, political turmoil and economic policy are all things that will affect your earnings.
If you are not networking with politicians, you are not doing your job correctly. Simple tactics like donations to charities or local schools can go a long way in the eyes of the government, especially in developing markets like previously mentioned.
Many politicians are property investors themselves. Some 185 MPs hold interest in property. This makes your job easier. They speak your language – so ensure that you speak theirs.
If you have a good relationship with politicians, your developments will never be hindered by red-tape or other bumps in the road. This might seem like a no-brainer to you, but many property investors still get this wrong.
Market to younger generations
You probably think of wealthy people as old and stuck in their ways. This couldn’t be further from the truth. The wealthy people of today want something different than what’s offered.
Today’s new money, startup millionaires want more from you. They don’t want traditional properties. They want green space – not a concrete block. Living, breathing buildings like we have already seen become the norm in Singapore are becoming the standard everywhere.
Include bike storage, smart tech, and other quality of life measures in your properties. Make your buildings not just greener physically, but figuratively too.
Mix style with sustainability and your properties will sell like gangbusters. Today’s new money is more socially conscious than previous generations. The key is less waste, less pollution – and more social impact.
A PWC survey claims climate change has become a greater risk to property portfolios. 73% of investors expect that risk to rise over the next five years. These measures won’t just satisfy your customers – but your own wallet too.
Your buildings should not just be greener – they should be smarter. We already have smart technology in our homes, but why not go further?
Offices and co-working spaces are very popular for investors. There’s no reason an office shouldn’t be on the cutting edge of technology. A new era in property is here. We have already seen a rise in PropTech companies. Businesses like digital appraisal company Bowery and even Purplebricks have revolutionised the market.
You need to be aware of the digitisation of real estate. There will be an increase in automation and augmentation for construction, leading to reduced costs, as well as other advances.
With the advent of 5G, your properties must make use of the Internet of Things, a system of computing devices which all talk to each other. Properties and people are now more connected than ever.
But why make these the buildings of the future? It’s your decision as an investor. Make them the buildings of the present (and don’t forget buildings insurance). If you are not implementing new tech into your investments, you are falling behind your competitors.
It’s easy to feel overwhelmed by this. Trying to juggle multiple properties globally is no mean feat (even when you have commercial property insurance to protect you). If you focus on just one or two of these trends, I have no doubt you will see a greater return on your investments.