Who can tell me the difference between the "glass half full investor" and the "glass half empty investor?" If you are going to say that one is a pessimist and the other an optimist then you'd be right, but at the moment it is more than that, potentially thousands or even millions more.
Let me explain: today we stand in a world divided. Some markets are experiencing strong growth and others the opposite. Some markets never even saw a downturn or a short one and have performed well throughout the rest of the global misery, some never saw a downturn but instead their continued growth became a bubble and now they look set to suffer during the rest of our recovery. And of course, some markets had a bad downturn and are now recovering, while some aren't even recovering at all.
Doesn't sound like a very good time to invest, especially not to the glass half empty investor, and this is where they are potentially missing out on millions of pounds, Euros and dollars in missed investment opportunities.
The glass half empty UK investor is so busy focussing on the fact that the recovery isn't picking up pace on a global scale or even in his home country, that he is liable to miss the fact that investors are making 8 and 9 per cent yields on buy to let property in the Humber region according to LSL Property Services. Of course prices are much lower in the Humber region than in the south and London so it is accessible to a much wider range of investors.
While the glass half empty US investor agonises over the fact that despite its starting in early 2010 the US recovery has yet to garner any real pace, the glass half full investor is snapping up foreclosed and distressed properties at rock bottom prices and capitalising on the unprecedented rental demand, and even rising prices in many areas.
The same glass half empty US-based investor will have missed out really strong capital growth over the last year or so in Thailand as the Baht grows against the dollar and will continue to miss out on its strong rental yields of 5.4% - 7.4%. All because Thailand is just too much of a risk in such a volatile world. In Thailand all the metrics are going in the right direction, falling vacancy rates saw apartment occupancy rates grow 30% compared to last year in Q2, taking overall occupancy to almost 90% in the apartment sector according to CBRE, while tenant occupancy was at a still-impressive 75% across all residential property types. Increasing occupancy is pushing up rents, yields and prices.
The glass half full investor can see that while the world is still a long long way from recovery on the whole, many markets are just hitting the turning point between down turns and big bucks. There is no better time to invest in property than when a market is just bottoming, but if you wait till the bottom is a date rather than an estimate or a feeling, you have already left it too late. This is where the optimist wins out, because they are more willing to take that chance on a gut feeling and/or an educated guess that a market is on the turn.
- Thursday 25 October 2012