I understand as it is speculative, capital growth isn't recommended to focus on with a strategy with the core being income - but what is a sensible way to factor in capital growth financial considerations/implications when someone's personal property plan is longer term, for example, 15-20+ years?
SG, London
Richard's Response:
Capital growth - the best ways to factor it in:
1. Force the (capital) appreciation by adding value to the property
2. Build the net equity by paying down the debt
These are the most reliable ways of ensuring you have some capital in your property.
The more speculative way is to ride the housing market, which will almost inevitably see prices rise over time due to the inflation, supply and demand and so on. However, if you want to see some tricky moments in history, just look at Japan over the past couple of decades...or say Burnley instead. Capital growth should happen (including in Japan and Burnley) and when it does, it will provide around half of your total return from property, give or take.
Lots I could add here but for now, I would simply say that it is the unreliable, non-guaranteed dimension of property investing but also one that could eventually make you very wealthy indeed over the long-term at the same time.
[…] I understand as it is speculative, capital growth isn’t recommended to focus on with a strategy with the core being income – but what is a sensible way to factor in capital growth financial considerations/implications when someone’s personal property plan is longer term, for example, 15-20+ years? SG, London Richard’s Response: Capital growth – the … […]