Property investment can be a complicated process especially if you are a novice in this area of investment. Investing in property is not a get rich scheme like other people may think. It requires you to gain knowledge on the foundations of investment and property; and then to learn the strategies to effectively put them into practice.
This means that you must be experienced in the techniques, systems and strategies that make property investing safer for you to try and ensure that your chances of everything working out are much higher. If you jump right in – you will get burned. You have been warned!
The following are tips I heartily recommend you consider to lead you on your way to smart property investing:
1. Plan your goals.
Consider your long term and short term goals if it is either for retirement or making money in property investment. Before deciding to invest a large amount, meticulously plan everything starting from choosing the property to determining the perfect location. Consider whether you need a company to trade through. Set up these entities and put your plan in place.
2. Educate yourself.
Before you dive in; ensure you research and educate yourself. Soak up all of the information that is freely out there but also invest in the latest books, courses and audios that focus on your particular strategy so that you can become the best you can be – without having the experience of doing it yourself. Once you start investing in property, then it is extremely important that you invest in continuing your education and learning new tactics and tips that will help you in your business.
3. Choose an area.
The investors who focus on certain areas are the investors who in the long-run benefit. Following a scatter-gun approach may mean that you end up with more properties but as they are very far apart you will risk inefficiencies in management, maintenance and travel. Choose and focus on one area and make that your golden goose.
4. Determine your chosen strategy
Do you want to refurbish and flip properties? Do you want to rent out to multiple people? Do you want to focus on the social housing market? Do you want to buy small 2-up-2-down properties and put in long-term tenants? Have focus and do not deviate.
5. Develop a power team.
In any financial venture, it is important to ask the help of experts and financial institutions for wealth and knowledge. The proper assistance is the key towards investing. You should always have a power team comprising of experts who can lend their expertise and professionalism.
6. Rent the property.
If you have a vacancy – you’re losing money! Always always always have your properties rented out! This is the only way to have a steady income. For every day your property isn’t rented is more days vyou losing money. Ensure you are using the most up-to-date tenancy agreement to protect yourself and your tenants.
7. It’s the long game that counts.
Property investment is a long-game and whilst you can make good short-term profits; you need to look out 10-20 years in the future. It’s essential that you are consistent and persistent. You have to follow and stick to your plan because you can become wealthy overtime. You may have a boiler fail one year that could wipe out most of your profits. But over 10 or 20 years – what will the overall house value have risen by? Planning out the future is the key to property investment.
8. You must learn to analyse properties quickly.
You will acquire this skill over time through experience. However do not get yourself caught up in the trap of “analysis paralysis” or literally overthinking everything.
Ask significant questions such as how much the property is really worth, can I get a discount off the asking price, what will it rent out for, how much will it cost me to convert it etc?
9. Negotiation skills are critical.
In property investment, the difference between a good deal and a great deal can often be just a few percentage points. Learning the art of negotiation is thus a skill that will set you up, not just for investing in property but also for wider life. Learn all you can, take some courses and then practice, practice and practice some more.
10. Build a business
Investing in property is not like investing in shares. You need to develop a business over time that serves you and your lifestyle in the best possible way. You should focus on the different elements of running the business. Whether its sale and marketing, operations, research, finance or governance; building a solid business will prove to be the answer to longevity and stability for you.
Property investment can be a risky venture if you get it wrong. Therefore, it is necessary to follow the correct strategies to ensure that you are venturing down the right path.
With these skills in place, you can therefore plan out the next 10 years and how you can retire through property.
There are many plans you can choose but if your aim is to “retire” from a day job, then property investment can be the way to do this slowly but surely.
Watch out for Part 2 coming soon where I take you through two examples of how you can effectively “retire” from property within 10 years.