Residential and commercial property investment markets worldwide are experiencing varying degrees of stress at the present time.
We think it would be a useful exercise to review the expectations that have motivated investors in the different forms of investment in the recent past, and how those expectations have or have not been met in light of the turmoil of the current financial market.
As our topic is property, we will look at residential and commercial property investment. A major motivation for residential investors in the recent past would have been capital gain, as net returns on residential investment property are traditionally quite low. Two factors detracting from the appeal of residential investment property are:
* the risk associated with the typical short-term leases of 6 to 12 months
* the fact that all property expenses are carried by the landlord.
If we look at the factors influencing investment in commercial property over the same period, we would see that the prime motivation of investors would have been Read the rest of this entry »
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