Wealth Building Information

Discover How To Protect Property Values From Falling Prices

by sacha tarkovsky

The property market after many years of stellar growth is now set for a period of decline and this is a worry to many homeowners.

So what can you do to protect wealth that is held in property? Let’s look at what can be done and also why property prices are heading south.

The background

Despite what many estate agents may tell you, the property boom has hit the buffers and the reason is simple:

Liquidity in the economy is being squeezed by higher interest rates. This makes exiting and new mortgages more expensive.

Even if rates were not to rise there are a huge percentage of mortgages that featured low starter rates which are now increasing and this is the equivalent of a rate rise to a huge amount of people.

So we have a market with huge amounts of vacant property, new buyers unable to buy and money tight for those with existing mortgages.

After such bog rises the market is falling and things will get a lot worse before they get better.

Protecting the value of your property

If you are a homeowner or invest in property there are a number of things you can do to protect yourself

1. Lock in the value of your property at its current value

There are companies who will lock in the value of your current property value for a set number of years, for a small premium to give peace of mind.

In a raging bull market these companies don’t do much business, but in a falling market business is booming and it is perhaps something that any homeowner should consider.

2. Improvements

There are many new improvements you can make to houses that will increase their value way beyond the cost of the improvements

3. Investment portfolio’s & Second homes

Can lock in the value of their portfolios (by doing point 1) but if capital growth is required the solution is simple:

The world is a big place!

And there are some great opportunities overseas with Central America being a great place to seek bigger gains. For example, Costa Rica and Panama offer property for up to 70% less than in the US and many investors are achieving growth rates of 30% or more per annum.

A Warning

The above are just three options you use to protect the value of your property as prices fall and beware the economic fundamentals show that values have a lot further to fall and things look like they will get a lot worse before they get better.

About the author
FOR MORE INFO ON LOCKING IN THE VALUE OF YOUR PROPERTY For more on locking in the current value of your property and Protecting your property from a fall in value visit our website for further details and a huge range of information at http://www.net-planet.org/index.html