Investing in property has a proven track record for increasing personal wealth over a period of time but there are no guarantees and you have to pick carefully and set some goals that are realistically achievable.
Here are some pointers on how to create a sensible investment strategy that looks at dealing with your short-term aims and allows you to see where you are heading with your portfolio in the future.
Get your numbers right from the beginning
One of the most fundamental aspects of property investing and probably the only true way you are going to achieve prolonged and consistent success over a period of time is to do the math and make sure the numbers make sense.
You need to know exactly what your financial position is and how much you can afford to commit to a project without stretching yourself beyond a certain limit.
Forming a professional alliance with specialists like Vystal Property Group, for example, could help you to achieve your future property investment goals if you are working alongside someone with plenty of experience as to what is required to achieve a decent return on your investment.
One of the classic rookie errors made by novice property investors is to put all their money into a project and leave nothing to cover for any unexpected maintenance and repair issues. Make sure you leave plenty of leeway with your finances for any rise in the mortgage rate and set aside some money for a maintenance fund so that you don’t have to panic when you are handed a maintenance bill that you hadn’t budgeted for.
A common theme amongst most successful property investors is they consistently have a level of control over costs and have confidence in their calculations. If you can achieve that same level of competence it will improve your odds of becoming a successful investor.
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Define your goals
It is also really important to have some clearly defined goals that you can measure your success against as you make progress with your property investment portfolio.
It helps to have some short, medium and long-term investment goals which can be used to establish whether your strategy is working out as planned and to see where some changes or additions can be made to keep you on track.
Your goals can be anything you want them to be as long as they are realistic and achievable.
It might be that you want to try and add a new property to your portfolio every year or achieve a certain amount of rental income, whatever your reasons for investing, the aim should be to ensure that your game plan is moving in line with the outcome that you are ultimately aiming for.
Your life as a landlord
A number of first-time landlords seem to be unprepared for the role they now find themselves in and it can be a shock to the system if you don’t do your research and have a good idea of what is involved.
When you become a landlord as part of the deal for becoming a property investor you will find yourself needing to make important decisions relating to the tenants who rent your property, what maintenance and improvements need to be carried out and when, plus other things that come with the territory such as setting rent levels and negotiating leases.
You do always have the option of appointing a managing agent who will take care of most of these activities on your behalf but there are fees and charges associated with using a third-party to handle the regular tasks associated with property ownership.
Decide whether you want to take on the role of a landlord by yourself to save costs and keep a tighter control over your property. If you do, find out what the job involves and make sure you are ready for this particular aspect of property investing.
Review your progress
Getting into property investing can be a learning curve and it can be lucrative as well as rewarding if you evolve and hone your skills in finding suitable properties that will earn you a decent return and gain you a profit.
It is always a good idea to develop a relationship with local property professionals so that you can find out when a suitable property might be coming up for sale and it is never a bad idea to do a regular stock take so that you can review your progress and learn from any mistakes you might have made along the way.
Oliver Ellis is a property investor who loves to watch out for new opportunities. When he finds them, he enjoys posting about them on a number of business and finance blogs.