Why are you considering investing in property?
What is your WHY (motivation) for investing in property? This is such an important starting point for any potential investor, and is the step that is commonly missed. Knowing why you are looking to start investing, and what you are ultimately trying to achieve is vital to overall success with your investing.
Are you looking to supplement your retirement income, are you looking to escape your 9-5pm corporate career, are you just looking for additional financial security, or to achieve better returns on your savings compared to the 1% returns offered by your bank? It is important to know what your reasons are.
Once you know these, you can develop and execute the investment strategy that helps you to achieve your goals. Every investor’s strategy is different, or should be, as investors have different goals, skills, risk levels, investment timescales, available time, ideas of how hands on/off they want to be, and ultimately their amount of available capital to invest.
Given the many strategies available for investing in property, there will always be at least one strategy that helps you achieve your personal goals. However, without identifying your motivations and investment objectives, you will not be able to craft a strategy that most efficiently achieves your goals.
There is a lot to be said about ‘taking action now’ and not endlessly procrastinating, but there is taking action, and taking the right action. You may take steps that are positive, from a financial perspective, but may not meet your timescales for your investment. You may purchase a property that is great at producing good rental returns, but you cannot re-finance the property or even sell the property within the timescales you need to. These are all factors that need to be considered through the lens of your personal goals.
Mistakes can be costly in property investing and so, it is important to avoid as many mistakes as possible, and ensure your investments are as efficient as possible. Spending the time to develop your personal strategy / plan and then continuing to review your success against this plan is important. If you define your goals, you can measure your investment’s performance against these goals. By doing more of the right things, and making changes when things are not going to plan you can be more successful.
If you have already started investing in property without a plan, don’t worry – but do stop and take the time to do one as soon as possible. It will help you review your investments to date against your goals and see whether they are indeed performing for you. They may not be performing as you had hoped or may not even be the right kind of properties to achieve your goals. Even if you do not plan to make any changes to your current properties, it will enable you to re-align new purchases towards your newly identified goals.
If you are struggling to develop a plan, or perhaps you know your goals, but are unsure of the right investment strategy, then don’t worry, this is very common. Seeking the right support is important, and if that support can help you identify the right course then this is money well spent, as it will help with avoiding mistakes and pay for itself in the same way a good accountant does.
If you would like to find out how Switch can help you to achieve your financial and lifestyle goals, then contact us for a free, no-obligation 20-minute consultation today.