The fact is that property has consistently outperformed other asset classes, and can provide good returns even when other areas of an economy are failing. However, to profit from property investment it is necessary to understand how the market works.

Our investment philosophy is that property investment is a medium to long term investment; it should be well-informed and should take into account the economic cycles which influence the growth rate of investments. Fortunately, property cycles are such that there is always a geographical area which is ripe for investment – it is a question of identifying where at any given time. The key lies in understanding the cycles.

When an economy is changing, property markets tend to change with it. If an economy is growing, property prices generally rise, and when a market slows, another market opens up. Investing earlier in this cycle means higher returns, but also higher risk as in an economy’s early years of growth it is usually more fragile. For example, the political and economic reforms that have stimulated the growth of a 'new economy' are still bedding in and are more easily overturned. One might think of Russia in this case.

Slightly later in the cycle, when the economy is showing consistent growth and reforms are more entrenched, the risks are lower but the returns may be lower as well. The Czech Republic is a good example of this. It is a transitional economy, transforming itself from communism to capitalism, but the investment climate is, we believe, excellent.

Transitional economies such as the Czech Republic offer a good compromise, offering higher predicted returns than in more mature economies, such as the UK, but are considered lower-risk than property investment in economies such as Russia or the Ukraine. Thus Validus believes the investment strategy is dependent on the individual: the question we ask you is 'at what stage in the economic cycle are you comfortable investing?'.

For further information about investing with Validus, call us on
020 7517 0580, email ask@validus-invest.com or register here.

view disclaimerPlease note: As with all investment property purchases, you are advised to take proper financial and legal advice at all stages. Investment values can decrease as well as increase. The content of this website is for informational purposes only, and readers are advised to speak to qualified legal experts and financial planners before taking any action. The information, tables, projections, and estimations provided by Validus are for indication only and do not represent factual information unless otherwise stated. The information is supplied without any guarantees whatsoever.