Property, as an investment vehicle, needs to be judged against other forms of investment, taking into account all those factors which are of prime importance. Although property is a special case, in that most of us need to invest in it either as a place to live or work, it is unlikely to be, and indeed should not be, the only place to have your money.


These are some of the important factors to consider:


Investment Philosophy

What is the rationale behind my wealth creation strategy? Is it based on sound analytical business principles, savings, hard work and taking a long-term view? Or do I favour the get-rich-quick approach, borrowing big, taking big risks and “sailing very close to the wind”?

Both methods can work, but the latter requires a lot of luck, good market timing and nerves of steel.


Risk and Uncertainty

Investing your hard earned savings/capital is scary. It’s even scarier to borrow funds and invest them, knowing that the risk involved is only your own calculation of the probability of getting a good return. There’s always the uncertainty of unknown and unknowable events occurring which might ruin the whole thing.

On the other hand, you can lose just as much by doing nothing: having your money sitting in an safe bank or building society in periods of low interest rates or high inflation, coupled with the eroding effects of taxation, means that over time your capital goes down in value.



This describes the ease and certainty with which you can withdraw your funds into cash. A bank or building society account is relatively risk free and liquid, in that you can withdraw your funds without notice.

Stocks (equities) likewise are relatively liquid in that you can telephone your broker and instruct him to sell on any working day – the sale will be completed within hours – but they are not risk free. Property, on the other hand, is an illiquid investment: it can take months or even years to dispose of a property asset, making it difficult to time the sale to your advantage.