Biggest Mistake Most Property Investors Make
When it comes to property investment, getting your strategy right is crucial in avoiding negative implications that will be felt in the coming years.
What’s a strategy, really? A well-constructed strategy should consist of many layers. Think of it in terms of a layered cake. Your strategy should put into consideration your lifestyle, financial and personal circumstances. At the same time, your strategy should be adaptable enough to changes, which may be necessary to keep your investments on track.
Now, how important is getting your strategy right? Your strategy makes up the foundation of your portfolio. Getting your strategy wrong from the outset could seriously impair your property investment journey in the future.
What is the best strategy?
If it is just strategy we are talking about, there are countless scenarios you can actually think of. A lot of experts would try to convince you that their strategy is the best. Then again, you see, there is really no “perfect” strategy that works for all. The effectiveness of a strategy solely depends on what suits your investment property.
Know your way in and out
Given that there is no such thing as “the perfect strategy”, feel free to consider a diverse mix of strategies as influenced by certain factors, such as the market conditions, how your other properties are performing, as well as your personal circumstances.
It is important that you determine your property’s purpose to your financial goals. What role do they play? How much should they contribute? One other thing that investors should never fail to do is establish their entry and exit strategy. This is something that most investors overlook at the time of purchase, not realising the (costly) consequences it entails.
Which strategy suits you?
Yet again, ask yourself which strategy suits your needs. The strategy you choose should be in line with your overall risk profile, at the same time, brace yourself financially in case the property’s performance ever goes downhill.
So the next time someone sways you to follow a specific strategy they consider as “the best”, be suspicious of their agenda. More often than not, they are selling only a particular type of property. They will eagerly highlight the positives and leave you with a somewhat shadowy information about the negatives.
When you are property hunting, try not to be persuaded by property investment companies pushing you to follow a particular strategy. Instead, know yourself, know your property and know what you want.
Define your investment strategy according to your personal goals and financial situation. Look for properties that match your circumstances. As your investment journey progresses, you need to modify your strategy too. It’s important that you know how to adjust and maintain your momentum.
