Before buying your next investment property - Does this property fit into my long-term strategy

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

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