Property Investment Requires Strategy and Planning
Before setting out to achieve a goal, most of us take time to consider the process involved in reaching that target.
For example, if you register to compete in a 110km cycle for the very first time, it is very unlikely that you would simply enter the race and expect to perform like Cadell Evans without any prior preparation or training.
To prepare, you would spend some time developing a training plan to ensure your body is ready for the race. This may include four cycles a week, gradually increasing your distance every few rides and modifying your diet to ensure your body is receiving the correct nutrients it needs to perform at its best.
In doing so, you are giving yourself the very best chance of reaching your goal by successfully completing the 110km ride.
The same principle can be applied to property investment.
Plan, Plan, Plan
Unfortunately, many investors do not see the importance of setting a short and long term strategy when investing in property.
In order to place yourself in the best possible position to create wealth through property, it is essential that you have a detailed plan to follow.
Having a plan will assist you in considering both your short and long term property investment goals, the ways in which you can monitor your progress and a likely timeframe to reach those objectives.
As well as the benefits mentioned above, developing your plan will encourage you to review your current financial position to firstly assess whether you are in a position to invest and if so, if your current financial structure is set up in the best possible way to assist you in reaching your investment goals.
As we know, there are many variables when it comes to investing in property so taking the time to thoroughly examine your personal circumstances is also necessary to reduce your risk, and forms an important part of your plan.
Your plan should give consideration to:
- Your current investment portfolio
- Existing financial obligations such as your current home loan, debts etc.
- Employment stability
- Relationship status
- Any existing or planned children
- Desired retirement age
What’s Next?
The fun part – looking at the types of properties suitable for your portfolio.
In doing so, it is important to note how many properties you are looking to acquire and a timeline in which you expect to be in a position to purchase these properties. This will assist you in identifying the necessary steps you must take in order to achieve each of your property purchases and prepare financially.
As with all plans, it is necessary to allow for adjustments. In this case, factors such as changes to the property market, interest rates or your personal circumstances may well occur so having contingencies in place will help you to better manage these changes and reduce your risk should they materialise.
Does your long term goal feel just out of reach? That’s the beauty of planning – breaking down your overall goal into smaller objectives will provide you with the framework to reach your target and allow you to identify what is realistic based on your personal situation.
As you can see, there is quite a bit to consider prior to pulling the trigger on your first investment property. We can’t stress enough the importance of not rushing into a purchase without thoroughly examining your personal financial position and identifying your investment goals first.
If you would like assistance in developing your personalised property investment plan, Property Road SA can help. We will arrange a complete assessment of your financial position and borrowing potential, then develop a plan based on your personal circumstances to set you on your way to successful residential property investment.
Contact Property Road SA or your local Zobel Broker Today