Planning is bringing your future into
the present so that you can do something about it now.
So do you have a plan in place? Because
if not, you’re not ready to buy your next investment property.
You see, creating an investment
strategy is the first essential step when you set out on your property
investment journey.
You need to document a proven property investment strategy that aligns with your risk profile, goals, and
time frame.
Your plan is not to beat the short-term
averages, but to build a substantial asset base in the long term, which means
we steer clear of "get-rich-quick schemes.”
Winning strategies lend themselves more to the tortoise
pace of slow and steady.
By way of example, 2 long-term
strategies you could consider for your next investment property are simply "buy
and hold” or BRRR - buy, renovate, rent, refinance and repeat.
Buy and hold involves leveraging
the complementary mechanics of equity and time which means you buy an asset and
hold onto it long term to allow your capital gains to give you extra equity for
the next purchase.
Once you’ve built a substantial asset
base you can then transition into the cash flow stage of your investment
journey.
BRRR strategy is similar but one
where you have the opportunity to "manufacture” capital growth through
renovations and speed up the growth of your portfolio.
For example, buying a ‘fixer-upper’ in
a desirable location and then renovating with a view to increasing your
property investment’s capital and rental value.
Of course, your strategic property plan
will involve much more than that. Some of the many parts include:
An asset accumulation strategy
A manufacturing capital growth strategy
A rental growth strategy
An asset protection and takes
minimisation strategy
A finance strategy including long-term
debt reduction
A living off your portfolio strategy
It’s vital then that once you choose
your strategy, you only look at investment properties that fit into your
long-term strategy rather than getting distracted by the many perceived
opportunities in the market.
Having a written Strategic Property
Plan means that you won't worry too much about market timing.
Rather you will concentrate on buying
the best asset you can afford and staying in the market for the long term.
Because if you have a long term plan
and if you believe that property will continue to increase in value in the long
term, as it has done historically, then why would it matter what the price of
your property is going to do in the next six weeks or even in the next six
months.
RealRenta has all the tools that a property manager has but for less than ¼ the cost of a property manager.
Join now and the cost is less than a cup of coffee a
week to manage your rental property
RealRenta also has a free vision, so why not check it
out
Jason Gwerder
Tuesday, 24 May 2022
