Are you treating your investment property as a business?
Many investors start out with the best of intentions and great enthusiasm but don’t set a plan in place. You would not start any other business without a business plan, so why should property investing be any different?
Writing clear goals and a blueprint for success is the best way to alleviate problems and make the most of your venture.
There are many different ways to invest in property, and with everyone having different interests and approaches, you’ll need to have a plan that suits your individual needs.
You need to keep the following considerations in mind:
Financial Goals:
Having financial goals and sticking to them is essential to investment success. It will help prevent you make quick judgements or investments based on emotion rather than reason.
Your property investment plan should include a detailed outline of the amount of income you intend to earn from each investment, along with a realistic timeframe of actions and goals.
Expenses:
Your financial goals are worthless unless you’ve also plotted out expenses, and how the price of each house affects your bottom line.
Determine how much income each property should generate, factoring in such expenses as interest and repayments, agent’s fees, and insurance.
With multiple properties, figuring out income and expenses will help you to determine how many properties you’ll want to own at any given time in order to see a substantial profit.
Analysing & Planning:
Don’t choose a house based on the fact you would like to live there, and don’t make plans to update interiors to suit your personal taste.
You have to detach yourself; buying an investment property is nothing like buying your own home.
One is personal, the other is business.
When coming up with your property investment business plan, it’s important to make sound business choices. Choose the location of your property purchase by looking at areas that are seeing growth. It’s all in the numbers.
Sales Strategy:
Having an exit strategy will help you be better prepared in the case of a rise or fall in the market, so you don’t make any quick decisions based on emotion.
Case Study:
Wayne was disappointed and frustrated with his current agent’s performance so came to us. Wayne had no plans with his property and no goals of what he wanted to achieve out of it. He was not looking at the property as a business and had not been guided as to how to achieve the most out of his property.
After signing up his property to our management we inspected Wayne’s property and recommended a minor renovation to turn the oversized unused living area upstairs into an extra bedroom. This cheap, cost-effective renovation involving the addition of one internal wall turned his property from a two-bedroom unit to a three-bedroom unit, allowing the rental amount to be increased by $100 per week. The increase gave Wayne an extra $5200 per year, allowing him to achieve long-term gains from his property.
The aim of our team of experts is to help educate throughout the process, offer further opportunities and empowering our clients to succeed.
