Devloping Property Investment Strategy

Topics: Investment, Asset, Rate of return Pages: 19 (4700 words) Published: May 9, 2010

This research proposal investigates the varying methods of choice when investing in direct or indirect property. Investment is the giving up of a capital sum now in exchange for the benefits to be received in the future, such as income flow and or capital gains. The results show a choice of investment opportunities that can be made by measuring risk and return and by balancing different types of asset classes.

Using the different investment choices available a strategy plan can then be developed tailoring to the needs of the client. There are four main areas of research that should be considered by each individual when developing a property investment strategy; the investor’s objectives, how much the investor can afford to invest, the level of risk acceptable, and the rate of return desired. The motive however for all investors is the same, to increase wealth and secure their future.



Research questions3

Literature review4

Investment requirements/objectives4
Property as an Investment5
Property investment analysis9
Developing an Investment Strategy11

Research Design13






There are many different types of investments some of which include; stocks and shares, bonds and bills, property, trusts, syndicates, debentures, insurance policies and superannuation. The type and size of these property investments appeal to different investors from the small individual properties to the property trusts worth millions of dollars. Location can also play a role in subdividing the different categories even further such as an industrialist might limit their demand for factory space to a specific area, whereas the industrial property acquired by investment fund for its portfolio may not worry about the country or region of which it purchase its property from.

Investment in property can be direct or indirect; can be acquired by way of auction, by tender, by private treaty or by take over bid (Enver 2002).

Australian investors have forever been fascinated in real estate as it still remains the main class of investment for individuals and investment funds, however many people are still under the impression that an asset of land will offer secure and lasting returns. In fact the acquisition of land must require informed and justifiable decisions involving the comparison of alike assets including tenanted houses and units, syndicates, property trusts and funds. (Rowland 1997)

The main area of study describes the planning required for investment in property. Investment returns and yields are explained with risk level outlined in the current market. Explanations in methods of investing in property and a plan of developing an investment strategy.

Comparisons to the stock market transactions are quick and easy, compared with property transactions where time and money is needed to collect information on each property that is up for sale. Then an inspection and analysis of each property needs to take place to ensure all the facts and figures are interpreted and taken into account and the optimal choice is made.

Research questions

Success can never be assured when acquiring an asset, as there are many risks involved such as the unpredictability of the future market, opinion and outlooks. Given that property is only one of the opportunities for investment on the market and that different investments appeal to different investors, the comparison of asset with asset is essential, but the comparison of that asset against other forms of investment is also just as important.

- To obtain the investment requirements and to explain property investment considerations through the measure of the amount of investment, return/yield, risk comparison - To compare property as an investment choice it is examined through risk, property classes and diversification. - To analyse the...

References: Australian Securities Exchange, 2008, (ASX)
Bird, P
Byrne P and Lee S, 2004, Different Risk Measures; Different portfolio compositions, Journal of property investment and finance.
Enever, N., Isaac, D. (2002), The Valuation of Property Investments, 6th ed., Estates Gazette, London,
Hargitay.S.E and Yu.S, 1991, Property Investment Decisions; a quantitative approach
Joslin, A. (2005), "An investigation into the expression of uncertainty in property valuations", Journal of Property Investment & Finance, Vol. 23
McMahon, Walter W
Benefits of Lifelong Learning”, Education Economics,
Newell G, Kottegoda P and Acheampong P, 2000, Using style analysis to assess direct property performance, Sixth Rim Real Estate Society, Sydney
Upton D, 1998 flirting with debt, Property Australia
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