Key considerations before investing

Before making any property investments, investors may find the following questions useful to consider before taking professional advice:

1. What are your investment objectives? Why are you investing and what do you want to achieve from your investments? Objectives might include long-term savings for retirement, building up a lump sum for a specific purpose, or generating additional income.
2. How much of your investment portfolio do you want to allocate to each asset class, and how much do you want to allocate, specifically, to property? This could depend on:
   
   • How much risk you are prepared to accept. How much you can afford to lose.
   • The current allocation of your assets across different asset classes.
3. How much diversification do you require in your property investments? Do you want to focus on investing in the UK, or do you want to invest in other territories? Do you want to focus on specific sectors that you may understand particularly well?
4. How much risk do you want to accept in your property investment, and which risks are you willing to accept?
5. How active do you want to be in researching and managing your property investments? Do you want to be directly involved, or do you prefer to invest in the services of a professional manager who will choose which properties or property company shares to invest in?

With answers to these questions, and a clear understanding of the areas you know about and those you need to get more information on, you can start to make a sensible assessment of the various property investment products available, and to discuss these with you financial adviser.

This guide seeks to highlight the need for investors to understand property, its performance measures and its risks as an asset class, before considering how to make an investment. You should also check that your adviser fully understands property as an asset class, and the range of available products, in order to advise you appropriately and with due consideration of the risks and your personal circumstances.

• You should be clear about which types of property investment products your adviser is permitted to advise upon and to deal in - check against the list of products outlined in this guide.


• You should also be clear about which products your adviser is experienced in advising upon, in order to evaluate the quality of their advice and recommendations.

No. You don't have to accept your adviser's recommendations. It's often recommended that investors consult a number of advisers before deciding on a particular adviser. Advisers aren't able to get specific qualifications in property investments so it is important to ensure your adviser has an appropriate level of understanding of property in order to provide you with sound advice about what is a complex investment class with many different types of products.

You can find out more information on commercial property investment from the following sites:

• Reita - www.reita.org
• Financial Services Authority (FSA) - www.fsa.org.uk
• Investment Property Forum (IPF) - www.ipf.org.uk
• Association of Real Estate Funds (AREF) - www.aref.org.uk
• European Public Real Estate Association (EPRA) - www.epra.com
• National Association of Real Estate Investment Trusts (United States)(NAREIT) - www.nareit.com

Your financial adviser should be able to advise you about investments generally, and property investment in particular.

Further information

To get advice on how to choose a financial adviser and key issues to consider you can find an adviser

To get help finding a financial adviser appropriate to your needs you can find an adviser

Alternatively, if you know where you want to invest, you can find a stockbroker