Investor legend Warren Buffett has just turned 90. After almost 80 years of investing, he now ranks in fourth position on the Forbes’ 2020 list and has an estimated net worth of US$67.5 billion. His company, Berkshire Hathaway, is one of the world’s most successful so it seems fitting to pay tribute to Buffett on his landmark birthday with some property investment lessons.
Invest in property for the long-term
A key to the success of Berkshire Hathaway lies in the length of investment. Buffett has always advocated investing in a commodity for the duration. “Nobody buys a farm based on whether they think it’s going to rain next year,” he said in a CNBC interview in 2018. “They buy it because they think it’s a good investment over 10 to 20 years.”
This maxim particularly applies to property investment. Buying real estate is usually its most profitable when you invest for the long term. This allows you to recover purchase costs, receive income from the property while you own it and then reap the rewards of capital appreciation when you sell later.
Did you know? BRIC Group advocates buying property to hold on your portfolio and all our investments come with a proven track record.
Understand your property investment
Another gem in property investment lessons from Buffett comes in how you perceive the investment. Buffett famously spends a lot of time each day reading reports and thinking about his next investment moves.
He believes that a full understanding of the asset will make the difference between a good and poor investment. This also applies to property investment – before you make the decision to buy, research it thoroughly and make sure you understand every aspect of the investment.
Did you know? BRIC Group publishes comprehensive market research for all its investment products and offers a full range of brochures for your information.
Invest in productive property
As the success of Berkshire Hathaway shows, its investment portfolio makes money. This also applies as one of the most important property investment lessons because the best real estate assets in your portfolio bring you income.
This might be in the form of rental yields through buy-to-let properties. These could be long-term rentals – Florida buy-to-let properties are a good example – or holiday lets. Annual rental income from real estate investments means your portfolio earns money passively and with little effort from you. You’ll reap even higher rewards if property management comes included.
Did you know? BRIC Group offers several investments with guaranteed rental yields for two years.
Invest in property you like
Buffett also advises liking what you invest in. This concept may sound strange – how can you ‘like’ intangible assets such as stocks and shares? But Buffett is adamant that the best investments are the ones that appeal to you most.
“Buy a stock the way you would buy a house,” he wrote in his letter to Berkshire Hathaway shareholders in 1977. “Understand and like it such that you’d be content to own it in the absence of any market.”
Did you know? BRIC Group is passionate about investing in property and owns all assets offered to clients. Take a look and find out how your portfolio can benefit.
(Source: CNBC, Berkshire Hathaway)