Property held under an operating lease. A property interest that is held by a lessee under an operating lease may be classified and accounted for as investment property provided that: [IAS 40.6] the rest of the definition of investment property is met the operating lease is accounted for as if it were a finance lease in accordance with IAS 17 Leases the lessee uses the fair value model set out in this Standard for the asset recognised An entity may make the foregoing classification on a property-by-property basis. Partial own use. If the owner uses part of the property for its own use, and part to earn rentals or for capital appreciation, and the portions can be sold or leased out separately, they are accounted for separately. Therefore the part that is rented out is investment property. If the portions cannot be sold or leased out separately, the property is investment property only if the owner-occupied portion is insignificant. [IAS 40.10] Ancillary services. If the entity provides ancillary services to the occupants of a property held by the entity, the appropriateness of classification as investment property is determined by the significance of the services provided. If those services are a relatively insignificant component of the arrangement as a whole (for instance, the building owner supplies security and maintenance services to the lessees), then the entity may treat the property as investment property. Where the services provided are more significant (such as in the case of an owner-managed hotel), the property should be classified as owner-occupied. [IAS 40.13]
Intracompany rentals. Property rented to a parent, subsidiary, or fellow subsidiary is not investment property in consolidated financial statements that include both the lessor and the lessee, because the property is owner-occupied from the perspective of the group. However, such property could qualify as investment property in the separate financial statements of the lessor, if the definition of investment property is otherwise met. [IAS 40.15] Recognition Investment property should be recognised as an asset when it is probable that the future economic benefits that are associated with the property will flow to the entity, and the cost of the property can be reliably measured. [IAS 40.16] Initial measurement Investment property is initially measured at cost, including transaction costs. Such cost should not include start-up costs, abnormal waste, or initial operating losses incurred before the investment property achieves the planned level of occupancy. [IAS 40.20 and 40.23] Measurement subsequent to initial recognition IAS 40 permits entities to choose between: [IAS 40.30]
a fair value model, and a cost model. One method must be adopted for all of an entity's investment property. Change is permitted only if this results in a more appropriate presentation. IAS 40 notes that this is highly unlikely for a change from a fair value model to a cost model. Fair value model Investment property is remeasured at fair value, which is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. [IAS 40.5] Gains or losses arising from changes in the fair value of investment property must be included in net profit or loss for the period in which it arises. [IAS 40.35] Fair value should reflect the actual market state and circumstances as of the balance sheet date. [IAS 40.38] The best evidence of fair value is normally given by current prices on an active market for similar property in the same location and condition and subject to similar lease and other contracts. [IAS 40.45] In the absence of such information, the entity may consider current prices for properties of a different nature or subject to different conditions, recent prices on less active markets with adjustments to reflect changes in economic conditions, and discounted cash flow projections based on reliable estimates of future cash flows. [IAS 40.46]
There is a rebuttable presumption that the entity will be able to determine the fair value of an investment property reliably on a continuing basis. However: [IAS 40.53] If an entity determines that the fair value of an investment property under construction is not reliably determinable but expects the fair value of the property to be reliably determinable when construction is complete, it measures that investment property under construction at cost until either its fair value becomes reliably determinable or construction is completed. If an entity determines that the fair value of an investment property (other than an investment property under construction) is not reliably determinable on a continuing basis, the entity shall measure that investment property using the cost model in IAS 1 The residual value of the investment property shall be assumed to be zero. The entity shall apply IAS 16 until disposal of the investment property. Where a property has previously been measured at fair value, it should continue to be measured at fair value until disposal, even if comparable market transactions become less frequent or market prices become less readily available. [IAS 40.55] Cost model After initial recognition, investment property is accounted for in accordance with the cost model as set out in IAS 16 Property, Plant and Equipment – cost less accumulated depreciation and less accumulated impairment losses. [IAS 40.56]
Transfers to or from investment property classification Transfers to, or from, investment property should only be made when there is a change in use, evidenced by one or more of the following: [IAS 40.57 (note that this list was changed from an exhaustive list to an non-exhaustive list of examples by Transfers of Investment Property in December 2016 effective 1 January 2018) ] commencement of owner-occupation (transfer from investment property to owner-occupied property) commencement of development with a view to sale (transfer from investment property to inventories) end of owner-occupation (transfer from owner-occupied property to investment property) commencement of an operating lease to another party (transfer from inventories to investment property) end of construction or development (transfer from property in the course of construction/development to investment property When an entity decides to sell an investment property without development, the property is not reclassified as inventory but is dealt with as investment property until it is derecognised. [IAS 40.58]
The following rules apply for accounting for transfers between categories: for a transfer from investment property carried at fair value to owner-occupied property or inventories, the fair value at the change of use is the 'cost' of the property under its new classification [IAS 40.60] for a transfer from owner-occupied property to investment property carried at fair value, IAS 16 should be applied up to the date of reclassification. Any difference arising between the carrying amount under IAS 16 at that date and the fair value is dealt with as a revaluation under IAS 16 [IAS 40.61] for a transfer from inventories to investment property at fair value, any difference between the fair value at the date of transfer and it previous carrying amount should be recognised in profit or loss [IAS 40.63] when an entity completes construction/development of an investment property that will be carried at fair value, any difference between the fair value at the date of transfer and the previous carrying amount should be recognised in profit or loss. [IAS 40.65] When an entity uses the cost model for investment property, transfers between categories do not change the carrying amount of the property transferred, and they do not change the cost of the property for measurement or disclosure purposes.
Government Officers Cooperative Housing SocietyDisposal An investment property should be derecognised on disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from its disposal. The gain or loss on disposal should be calculated as the difference between the net disposal proceeds and the carrying amount of the asset and should be recognised as income or expense in the income statement. [IAS 40.66 and 40.69] Compensation from third parties is recognised when it becomes receivable. [IAS 40.72] Disclosure Both Fair Value Model and Cost Model [IAS 40.75] whether the fair value or the cost model is used if the fair value model is used, whether property interests held under operating leases are classified and accounted for as investment property if classification is difficult, the criteria to distinguish investment property from owner-occupied property and from property held for sale the extent to which the fair value of investment property is based on a valuation by a qualified independent valuer; if there has been no such valuation, that fact must be disclosed
the amounts recognised in profit or loss for: rental income from investment property direct operating expenses (including repairs and maintenance) arising from investment property that generated rental income during the period direct operating expenses (including repairs and maintenance) arising from investment property that did not generate rental income during the period the cumulative change in fair value recognised in profit or loss on a sale from a pool of assets in which the cost model is used into a pool in which the fair value model is used restrictions on the realisability of investment property or the remittance of income and proceeds of disposal contractual obligations to purchase, construct, or develop investment property or for repairs, maintenance or enhancements Additional Disclosures for the Fair Value Model [IAS 40.76] a reconciliation between the carrying amounts of investment property at the beginning and end of the period, showing additions, disposals, fair value adjustments, net foreign exchange differences, transfers to and from inventories and owner-occupied property, and other changes [IAS 40.76]
significant adjustments to an outside valuation (if any) [IAS 40.77] if an entity that otherwise uses the fair value model measures an item of investment property using the cost model, certain additional disclosures are required [IAS 40.78] Additional Disclosures for the Cost Model [IAS 40.79] the depreciation methods used the useful lives or the depreciation rates used the gross carrying amount and the accumulated depreciation (aggregated with accumulated impairment losses) at the beginning and end of the period a reconciliation of the carrying amount of investment property at the beginning and end of the period, showing additions, disposals, depreciation, impairment recognised or reversed, foreign exchange differences, transfers to and from inventories and owner-occupied property, and other changes the fair value of investment property. If the fair value of an item of investment property cannot be measured reliably, additional disclosures are required, including, if possible, the range of estimates within which fair value is highly likely to lie
Poi Real EstateThe average person has a hard time understanding how investment property is different from a primary residence and can be a little confusing. Consumers also struggle to find the right investment property that suits their needs. An investment property is a piece of real estate purchased with the goal of generating a return on investment through rental income, future sales of the property, or both. An individual investor, a group of investors, or a business may own the property. Owning your own home can be a dream come true, but it can also be really expensive. With properties now costing as much as mortgage payments, it's not surprising that more and more people are looking for ways to make investments in other properties to generate income. An Investment Property is an asset you purchase for your future benefit. It generates some form of income – interest, rents, or even royalties – that fall outside the scope of the property owner's regular line of business. Investment properties are often seen as a burden. They take a lot of time to manage and care for, and that's why many property owners don't even want to own one. Oftentimes, the quality of the investment property is not as high as the quality of the primary residence, which can lead to more problems in managing and caring for it. People are not interested in investing in property because they don't know the first thing about it and this lack of knowledge can be costly. If you want to make more money, you need to try new things. And property is on the rise - it's a smart investment for many countries and cities around the world. Investors like you are looking for someplace to put their money that will offer them peace of mind while generating profits, and real estate investment property is one of the most popular investments today.
It's time to reduce all of this stress. We, as Trem Global, make it our business to know about the latest trends in the real estate market. What does your ideal home look like? When do you intend to move there? How much money are you willing to spend on maintenance fees? Do you prefer Istanbul or Izmir? We have specialists in each city who can point you in the right direction. Not sure which solution is best for your company? Call our team of experts, and we'll assist you in making the best investment decision. I always tell people that real estate has the potential to be a great investment. But getting started can be daunting. As a real estate investor of eight years, I’ve found that the key is to take small steps. When I first began investing at age 23, I set a modest goal to make a bit of extra money on top of my engineering salary with one or two rental properties. Today, I own 61 rental units that last year grossed $431,000 in rental income. I’m also a real estate coach at Roofstock Academy. I mostly work from a converted van that my wife and I live in. When we’re not traveling across the U.S. in our van, we stay in our California duplex home.
Thanks to his flexible streams of income, Michael Albaum and his wife spend part of the year living and traveling across the U.S. in their converted van. Thanks to his flexible streams of income, Michael Albaum and his wife spend part of the year living and traveling across the U.S. in their converted van.Photo: Michael Albaum After paying my mortgages, property taxes, property management and maintenance fees, I earn about $6,000 per month in passive income from my real estate portfolio. Since 2019, I’ve been investing that money into a redevelopment project that is converting eight units into 17, and living off my full-time coaching salary. How I bought my first real estate property In 2013, right out of college, I worked as a fire protection engineer and made $73,000 a year. Saving for an investment property was a goal of mine, so I lived well below my means. I paid $800 per month to rent an apartment with roommates. My employer covered essential expenses like my car and cell phone bills, allowing me to save even more every month.
Nfc Phase 2In 2014, I used $40,000 I’d saved in cash and sold $20,000 worth of stocks to make my first real estate purchase: a $295,000 single-family home in Southern California. I also took out a loan from a family member for the remaining cost, so I didn’t have to borrow from the bank. The home sat vacant for two months before I rented it out, but it didn’t need any renovations. The $1,810 per month rent from my tenant allowed me to cover monthly loan payments on the home plus the operational expenses of managing it. Growing my real estate portfolio By 2016, I was the owner of three houses. I financed my second purchase through a traditional bank loan, and I bought the third with a $250,000 loan from a family member at a 4%, 30-year fixed rate. I made $51,404 that year in gross rental income from all three properties, and while most of that money went towards covering mortgage, maintenance and property management costs, I was also able to take home around $1,800 per month. In 2017, I decided to ramp up my savings to purchase additional real estate. I found an even cheaper apartment to share with roommates, and invested those savings plus the money I was making off real estate into the stock market and my investment accounts.
When I learned about how much further each dollar could go in opportune markets — where cash flow was high and buying prices were low — I started looking outside of California. I bought the cheapest multi-unit properties I could find in the Midwest, mainly Ohio and Kentucky, and fixed them up. To do this from afar, I built relationships with agents and property management professionals in those markets, so I knew I’d have a team on the ground to identify the best properties and take care of my tenants. I work with small family-owned management businesses, whose fees cost an average of 7% of my gross rent per property but can reach up to 20%. How to start your own real estate investment journey I feel very lucky that I get to work a normal 9-to-5 job as a coach from my van and explore new parts of the country — while also earning passive income through my real estate investments. Albaum works a 9-to-5 as a real estate investment coach, and is currently managing a redevelopment project.Photo: Michael Albaum I believe that if you save up enough money and look in the right places, you can get a leg up by investing in real estate — even in an era of sky-high home prices. Here’s my best advice:
Start small with a well-researched strategy My investing strategy is the “BRRRR” method: Buy, rehab, rent, refinance, repeat. I buy homes in markets where units are renting for much more than their monthly mortgage payment. I fix them up, then rent them out to cover the home’s cost and to invest in other properties. To learn what strategy works best for you, I recommend researching the basics. There are so many resources available, from podcasts (including mine, The Remote Real Estate Investor) to online courses. You can also reach out to other investors on forums like BiggerPockets, where the BRRRR method was popularized, to learn their strategies. A lot of people also wonder what their return on investment goals should look like. I always say that folks should be comparing the total returns they can get in real estate (calculate this by adding cash flow, appreciation, loan payments and tax benefits) against the returns they could be getting in other investment vehicles. Pick a number that works for you. And most importantly, don’t compare yourself to anyone else.
Real Estate Investment Groups Real estate investment groups (REIGs) are sort of like small mutual funds for rental properties. If you want to own a rental property but don’t want the hassle of being a landlord, a real estate investment group may be the solution for you. A company will buy or build a set of buildings, often apartments, then allow investors to buy them through the company, thus joining the group. A single investor can own one or multiple units of self-contained living space. But the company that operates the investment group manages all the units and takes care of maintenance, advertising, and finding tenants. In exchange for this management, the company takes a percentage of the monthly rent. There are several versions of investment groups. In the standard version, the lease is in the investor’s name, and all of the units pool a portion of the rent to guard against occasional vacancies. This means you will receive enough to pay the mortgage even if your unit is empty. The quality of an investment group depends entirely on the company that offers it. In theory, it is a safe way to get into real estate investment, but groups may charge the kind of high fees that haunt the mutual fund industry. As with all investments, research is key.
Real Estate Limited Partnerships A real estate limited partnership (RELP) is similar to a real estate investment group. It is an entity formed to buy and hold a portfolio of properties, or sometimes just one property. However, RELPs exist for a finite number of years. An experienced property manager or real estate development firm serves as the general partner. Outside investors are then sought to provide financing for the real estate project, in exchange for a share of ownership as limited partners. The partners may receive periodic distributions from income generated by the RELP’s properties, but the real payoff comes when the properties are sold—with luck, at a sizable profit—and the RELP dissolves down the road. Real Estate Mutual Funds Real estate mutual funds invest primarily in REITs and real estate operating companies. They provide the ability to gain diversified exposure to real estate with a relatively small amount of capital. Depending on their strategy and diversification goals, they provide investors with much broader asset selection than can be achieved through buying individual REITs.
Like REITs, these funds are pretty liquid. 7 Another significant advantage to retail investors is the analytical and research information provided by the fund. This can include details on acquired assets and management’s perspective on the viability and performance of specific real estate investments and as an asset class. More speculative investors can invest in a family of real estate mutual funds, tactically overweighting certain property types or regions to maximize return. Why Invest in Real Estate? Real estate can enhance the risk-and-return profile of an investor’s portfolio, offering competitive risk-adjusted returns. In general, the real estate market is one of low volatility, especially compared to equities and bonds. Real estate is also attractive when compared with more traditional sources of income return. This asset class typically trades at a yield premium to U.S. Treasuries and is especially attractive in an environment where Treasury rates are low.
Diversification and Protection Another benefit of investing in real estate is its diversification potential. Real estate has a low and, in some cases, negative, correlation with other major asset classes—meaning, when stocks are down, real estate is often up. This means the addition of real estate to a portfolio can lower its volatility and provide a higher return per unit of risk. The more direct the real estate investment, the better the hedge: Less direct, publicly traded vehicles, such as REITs, are going to reflect the overall stock market’s performance. Because it is backed by brick and mortar, direct real estate also carries less principal-agent conflict, or the extent to which the interest of the investor is dependent on the integrity and competence of managers and debtors. Even the more indirect forms of investment carry some protection. REITs, for example, mandate that a minimum percentage of profits (90%) be paid out as dividends. Some analysts think that REITs and the stock market will become more correlated, now that REIT stocks are represented on the S&P 500.
8 Inflation Hedging The inflation-hedging capability of real estate stems from the positive relationship between gross domestic product (GDP) growth and demand for real estate. As economies expand, the demand for real estate drives rents higher, and this, in turn, translates into higher capital values. Therefore, real estate tends to maintain the purchasing power of capital by passing some of the inflationary pressure onto tenants and by incorporating some of the inflationary pressure, in the form of capital appreciation. The Power of Leverage With the exception of REITs, investing in real estate gives an investor one tool that is not available to stock market investors: leverage. Leverage means to use debt to finance a larger purchase than you have the available cash for. If you want to buy a stock, you have to pay the full value of the stock at the time you place the buy order—unless you are buying on margin. And even then, the percentage you can borrow is still much less than with real estate, thanks to that magical financing method, the mortgage.
Most conventional mortgages require a 20% down payment. 9 However, depending on where you live, you might find a mortgage that requires as little as 5%. This means that you can control the whole property and the equity it holds by only paying a fraction of the total value. Of course, the size of your mortgage affects the amount of ownership you actually have in the property, but you control it the minute the papers are signed. This is what emboldens real estate flippers and landlords alike. They can take out a second mortgage on their homes and put down payments on two or three other properties. Whether they rent these out so that tenants pay the mortgage, or they wait for an opportunity to sell for a profit, they control these assets, despite having only paid for a small part of the total value. How Can I Add Real Estate to My Portfolio? Aside from buying properties directly, ordinary investors can purchase REITs or funds that invest in REITs. REITs are pooled investments that own and/or manage properties or which own their mortgages.
Female Photographer In LahoreWhy Is Real Estate Considered to Be an Inflation Hedge? Home prices tend to rise along with inflation. This is because homebuilders' costs rise with inflation, which must be passed on to buyers of new homes. 10 Existing homes, too, rise with inflation though. If you hold a fixed-rate mortgage, as inflation rises, your fixed monthly payments become effectively more affordable. Moreover, if you are a landlord, you can increase the rent to keep up with inflation. Why Are Home Prices Impacted by Interest Rates? Because real estate is such a large and costly asset, loans must often be taken out to finance their purchase. Because of this, interest rate hikes make mortgage payments more costly for new loans (or on existing adjustable-rate loans like ARMs). This can discourage buyers, who must factor in the cost to carry the property month-to-month. The Bottom Line Real estate can be a sound investment, and one that has the potential to provide a steady income and build wealth. Still, one drawback of investing in real estate is illiquidity: the relative difficulty in converting an asset into cash and cash into an asset. Unlike a stock or bond transaction, which can be completed in seconds, a real estate transaction can take months to close. Even with the help of a broker, simply finding the right counterparty can be a few weeks of work. Of course, REITs and real estate mutual funds offer better liquidity and market pricing. But they come at the price of higher volatility and lower diversification benefits, as they have a much higher correlation to the overall stock market than direct real estate investments.
As with any investment, keep your expectations realistic, and be sure to do your homework and research before making any decisions. Mortgage lending discrimination is illegal. If you think you've been discriminated against based on race, religion, sex, marital status, use of public assistance, national origin, disability, or age, there are steps you can take. One such step is to file a report to the Consumer Financial Protection Bureau (CFPB) or with the U.S. Department of Housing and Urban Development (HUD). 11 Learn the Basics of Trading and Investing Looking to learn more about trading and investing? No matter your learning style, there are more than enough courses to get you started. With Udemy, you’ll be able to choose courses taught by real-world experts and learn at your own pace, with lifetime access on mobile and desktop. You’ll also be able to master the basics of day trading, option spreads, and more. Find out more about Udemy and get started today. The property sector has always managed to capture the interest of many in Pakistan. However, working with it is not a simple story of just buying a plot or home and selling it at a higher price. To be a success in the trade and earn handsome rewards, you need to know the basics of real estate investment in Pakistan. These involve numerous intelligent considerations and financial know-how.
Here is a simple guide on how to invest in real estate in Pakistan and best utilise your capital for maximum returns. REAL ESTATE INVESTMENT IN PAKISTAN real estate investment opportunities in Pakistan Real estate investment can be quite lucrative, but you first need to understand its basics First of all, you should know that there is no exact way to define property investment. However, the process boils down to the sale, purchase, or lease of property for the sake of capital gains. There are various types of real estate investments, but here is a list of those ones more applicable to the Pakistan property market: Buying Files Buying plots for resale at a higher value Buying a property to rent out Buying open land in anticipation of development Let’s further discuss the basics of real estate investment in Pakistan.
Property Agriculture Land For Sale Near LahoreBUYING FILES A file is basically a future plot in a society without any allocation or possession. These documents are issued before the development of a locality and are a favourite among long-term investors. Once a file is officially linked with a developed plot, its rates go up significantly. It means that the return on investment at this stage can be quite high. A file, as such, can be your answer to how to invest in real estate with little money, should you choose to buy it early. To make sure you don’t get confused between buying files and buying a plot, take a look at the key differences between a plot file and a plot. BUYING PLOTS FOR RESALE AT HIGHER VALUES This is one of the most common types of investment activities pursued in the real estate sector of Pakistan. Basically, it involves investors buying plots and holding on to them until their prices go up; over time and with further project development. This venture, overall, can be quite lucrative. And in following through with it, you’ll never need to respond to the ‘why invest in real estate?’ query. Your profits will speak for themselves!
investing in Pakistan property market Renting out your property is a good way to generate extra income while maintaining the ownership BUYING PROPERTY TO RENT OUT Buying a house, apartment, or commercial property and leasing it out is an ‘income-generating’ type of property investment. You remain the owner of the property and get a constant return on investment through rental income. You can take a look at our comprehensive guide on how to rent out your house for more clarification. BUYING OPEN LAND IN ANTICIPATION OF DEVELOPMENT This is one of the less common and riskier types of real estate investment in Pakistan. It involves buying open and undeveloped land that is not owned by any society. Investors who go for this approach anticipate that a developer will buy the land from them at higher rates to establish a project. Currently, buying open land is an ongoing trend in the various mouzas of Gwadar, which are being developed under the China-Pakistan Economic Corridor (CPEC) initiative. WHAT ARE THE PROS AND CONS OF PROPERTY INVESTMENT? Fixing money in the property market is not everyone’s cup of tea. There are both pros and cons of property investment to consider. So, you need to take careful note of them before making your foray into the field.
This breakdown should help you out. Pros: Why invest in real estate? Cons (depending on your investment appetite) Potential for high returns in a short time Prices may not go up as soon as expected A solid asset in your possession Possessing property involves paying property taxes A steady source of income, if rented out Real estate cannot be liquidated urgently Can be held for future personal use Property value may fall due to certain situations A good asset to pass over to your kin Legal issues or fraudulent practices may occur HOW SHOULD YOU GO ABOUT IT? buying a property in Pakistan You need to do your due diligence to be successful in the trade As a beginner in the world of real estate investment, you may be worried about not having in-depth knowledge about real estate investment in Pakistan. However, that is nothing to worry about. There are only a few simple steps that are required for any successful investment pursuit in the Pakistan property market. Once you learn them, you’ll be well on your way to striking some real estate gold!
Property Commercial Plots On Installments In LahoreConsider the following points: DETERMINE YOUR REQUIREMENTS First of all, think thoroughly about your investment goals You need to determine your holding power, i.e., the amount of time you are willing to hold on to your purchase before putting it up for sale. Also, confirm what your exact budget is so that you can conduct your market research accordingly. Additionally, you need to decide whether you wish to invest in the city of your residence or someplace else. DO YOUR RESEARCH Once you’ve determined what your requirements are, do your research by checking property options that fit your needs. Utilise a wide range of resources for this purpose. For the property market in Pakistan, browsing through .com, the top property portal in the country, can give you a very good idea about the best projects for you to invest in. Furthermore, ensure that any project you’re interested in comes with all the relevant regulatory approvals. You can check with the development authority of the area you are interested in to confirm this.
It is also a good idea to talk to a few agents about the price and demand trends in your chosen area. This information will give you an idea about how much appreciation in property value (price) you can expect. With extensive research, you may also be able to determine your own how-to-invest-in-real-estate-with-little-money code. BUY YOUR PROPERTY Once the preliminary research is done and you have narrowed down your options for real estate investment in Pakistan, it is time to purchase your property. Keep all legal considerations in mind and get the relevant transfer and sales deeds checked by a lawyer. Moreover, consider the location and stage of development of your plot or home. These factors have a major impact on how soon the rates of your property go up. Always buy property approved by the relevant government authorities, so that you don’t lose out on your investment in the case of any legal issues.
If you are a beginner in the property market, this guide on how to buy a house for the first time will definitely help you out. WAIT FOR THE APPROPRIATE TIME PERIOD OR FIND A RELIABLE TENANT This is where it gets tricky because this is the stage that sets apart seasoned investors from property market newbies. There are a number of factors that affect, or dictate, how long you should hold on to your property. These include market trends, the general political situation, the project’s state of development, project location, and the developer’s reputation. For example, projects in Defence House Authority are popular with both local and overseas investors due to their reputation for being reliable and quality development. As for renting out your property for gaining a steady income, there are a number of considerations to keep in mind. First and foremost, there needs to be a written and signed tenancy agreement between the two parties involved. This document should outline the span of the tenancy, the amount of rent and when it is to be paid, the rate at which the rent will increase over time, and the process of eviction in case you want your property for your own use.