You should have some investment in property. But if you own your own house you already have it.

Why?
Property is an important asset class. It is an ideal investment in an island country with limited space. It is likely to be a safe store of value. If you buy to let it will provide some income. It will diversify your risk. Any long-term investment portfolio should include property.

Own house first
Your first property investment should always be your own home. If you buy your house you can think of it as a buy-to-let investment (you save the rent you would otherwise have paid) with the following advantages:

• no fees to letting agent
• 100% occupancy
• cheap maintenance
• you are your own landlord

But our house is not all investment
We all have to live somewhere. It would be wrong to regard the whole value of our house as 'investment' in the sense of being a potential source of gain. What matters is the difference between the value of our house and the cost of the smallest house to which we could bear to trade down. That difference is a cushion that could be made available if we suffer future bad luck.

Of course when the kids have been booted out of the family home it might be natural to sell it and move into something smaller. So our property investment is realised in the natural course.

Property funds
If you chose to invest in property funds, the usual warnings about costs and fees apply. And remember these funds usually invest in commercial property. Nothing wrong with that, but the economic drivers are different from the retail property market that we think we know something about.

Our view is that the simple investor, and even the advanced investor, should treat commercial property as just another business, like banking or oil, to be included in an equity portfolio.

To summarise.......
You should have some investment in property, but once you own your home you've already got it.