How liquid are your assets?
It’s not going to come as a huge shock when I tell you that there are certain risks involved in real estate investment – but knowing how liquid your assets are could give you an advantage.
No one has a crystal ball that can tell us what the market is going to do, or if a global pandemic is going to change the whole ball game overnight.
Even with the greatest levels of education and knowledge, the unexpected can happen.
However, some risks can be assessed and calculated, and even budgeted for, if you know what you’re doing and go in with your eyes open.
One of these risks is assessing how liquid your assets are.
WHAT IS A LIQUID ASSET?
The best example is the money you have in your hand, your pocket or your bank account right now. It can be easily accessed, transferred and used to buy or pay for things. It’s not hard to get at or use.
Real estate is not especially liquid. If you own a $500,000 property and need that equity today, it’s going to be hard, if not impossible, to get. Your money is essentially trapped for a period of time.
But, some real estate is more liquid than others, meaning if you’re only looking to invest for a short-time, or you think you may need to sell quickly, there are the kinds of property you should invest in.
LIQUID REAL ESTATE
Look for neighbourhoods with proven sales histories, which have been in the market for a long time.
Emerging markets – areas that going through gentrification or change, are going to be far less liquid. You need to be prepared to hold onto these properties for a longer period of time to exploit the most growth and value.
As a property expert I would encourage a property investor to avoid selling property once you’ve bought it. Any profit you’ve made in the buying transaction can be quickly wiped out through tax and selling fees if you don’t hold onto the property for some time.
Remember we talk about property investment being a long game, a 10-15 year proposition, so if you think you’re going to need to sell quickly, choose your property carefully.
LEARN HOW TO BE A SMART INVESTOR
Smart investors are educated investors and they don’t go-it alone. They employ a team of experts help them excel where others can’t.
To find out how you can be one of those people, we’re running a free a property investing seminar.
Here you’ll be equipped with the tools, resources and support to thrive, and not fall behind on your path to financial freedom – whatever that may look like for you.
Book your spot now and find out what you need to know about the current market landscape and how you can make it work for the ultimate wealth creation opportunities.
Sam Saggers
Co Founder Positive Real Estate
