Revealed: how can you be a strategic investor?
Originally published at https://www.propertyinvestortoday.co.uk on May 25, 2020.
It’s really important now, more than ever, that investors think strategically — with so much uncertainty and so many unknowns as a result of the current pandemic.
But how can you know what works, and what doesn’t, when it comes to investing in a complex property world, which has just got even more complex?
Anna Clare Harper, author of Strategic Property Investing — What Works and What Doesn’t in a Complex Property World, says Covid-19 has created an immediate and unavoidable opportunity to focus on risk.
“Firstly, it has never been more important to minimise the risks you are exposed to. And secondly, investors all need to understand their risk preferences better to move forward safely in the short, medium and long-term,” she explains.
“There are huge opportunities and I expect this to be the case for much of the coming year. How investors choose to focus needs to be aligned with what risks they are happy with: there’s incredible development opportunities for the risk-tolerant seeking infinite returns, and there’s exciting buying and optimisation opportunities for the more risk-averse.”
She adds: “For the kind of investor I typically work with, who are looking for easier ways to make profits throughout market changes, the current market environment highlights three important benefits to ‘taking the long view’.”
Confidence for the future
According to Harper, the truth is that ‘uncertainty is the only certainty there is’ at the moment. This has been vividly illustrated by Brexit and Covid-19, and she says we will see it again. Long-term, resilient investments that will be in high demand, whatever the weather, help investors feel confident in the future, she advises.
“Ultimately, what most investors really want is a safe, secure financial future and the knowledge that what they have spent their time, effort and money on will pay dividends into the future.”
Stable value through positive impacts
Whatever happens in the banking sector — whether finance is easy and cheap, or quite the opposite — assets with good ‘fundamentals’ that deliver value to the customer (in this case, the tenant) stand the test of time.
“Delivering genuine social benefits is the crux of long-term value,” she argues. “Investing for the long- term, in housing that people will want to live in for years to come, is a vital product and part of our social and economic infrastructure. The social benefit it delivers makes this kind of investing less risky and it is far more environmentally-friendly than building. In fact, construction is one of the most environmentally-damaging pursuits there is.”
Ability to capitalise on new developments, for exponential returns
Harper says that, just because the asset is bought and held for the long-term, doesn’t mean it needs to be old-fashioned.
“For example, you can invest to improve existing assets at a fractional cost with a substantial return on investment, improving performance for investor and tenant alike through exciting new technologies, ranging from solar panels to cloud-based reporting and viewings.”
A book to help investors
Harper, who is the co-founder of property fund Anglo Residential, recently saw the paperback version of her first book published. Since being launched in April 2020, it has achieved Amazon ‘Bestseller’ status in Real Estate and Investing. It is described as being ‘essential reading’ for investors with funding but limited time, who know they want to invest in residential property.
The book’s blurb goes as follows: “For more than 20 years, UK residential property has been seen as one of the best investments available. It has offered investors a brilliant way to grow their wealth safely, profitably and easily. The trouble is, the market has changed. Strategies that worked before are now less profitable, if profitable at all.
To succeed in this fast-changing, uncertain context, investors must understand what’s changed, and what works now. But in an age of ‘information overload’, it can be hard to cut through the noise.”
Andrew Baum, a professor at the University of Oxford, described the book as ‘timely, clear and concise advice which will help you to avoid the mistakes that many of us make in residential property investment’.
Harper herself says: “As market pressures have risen, the rosy glow of a buy-to-let boom has been dimmed down. Investing in residential property can still offer a way for investors to make great returns, but it’s not as easy as it once was. To succeed in this complex UK property market and to avoid common, expensive mistakes, investors need the right strategy, and they need to know what works and what doesn’t, before they invest.”
Topics discussed in the book include:
How the UK property market has changed, and why what worked before won’t work anymoreWhy it’s still a great time to invest, if you know what works5 questions investors must ask, before they investHow to assess deals with limited time and informationHow to adapt in the face of changeHow to avoid common, expensive investing mistakes
As well as being an author and property fund co-founder, Harper also describes herself as a property investment strategist, entrepreneur, TEDx speaker and podcast host.
After graduating with a RICS-accredited property degree from the University of Cambridge, she worked as a professional strategy consultant at Deloitte, then co-founded Anglo Residential, a UK property fund focused on building a £150 million-plus rental housing portfolio aligning market trends to deliver compelling returns.
She lives in London and hosts The Return: Property & Investment Podcast, which is one of the highest-ranking podcasts in the property investment space on iTunes.
*To order a copy of the book, you can go to: bit.ly/strategicpropertyinvesting. The paperback is £12.99, while the eBook is £3.99.