The importance of a property investment strategy

property investment strategy

Scroll through the headlines and property investing can seem easy. After all, you purchase a property, rent it out and voila, you’re a property investor, right?

Um, not quite. Like many things, there’s a distinct difference between being a property investor and being a successful property investor.

That difference is rarely related to luck, but instead comes down to strategy. So, let’s recap the importance of having a property investment strategy and what exactly that entails.

Fail to plan, you plan to fail 

Any property investment is part of a wider financial plan that takes in your current position, and where you hope to go, within a specific timeframe.

Whether you’re investing in property for your retirement, investing to leave a legacy, or simply looking to complement other assets with the security of bricks and mortar, it’s important to know exactly what you are trying to achieve.

Once you know where you’re seeking to go and why, the property investment strategy will plan for that accordingly, factoring in things like your appetite for risk and your current situation.

Time spent in reconnaissance is seldom wasted 

Property investment is not about blindly circling a point on a map and saying: ‘Yep that’s where I’ll buy’. It involves research into the best possible locations, with the best capital growth, and rental return.

The factors to research include:

  • Suburb demographics
  • Infrastructure plans and government zoning
  • Population growth
  • Potential capital growth
  • Rental vacancy rate
  • Average income and employment industries
  • The features and benefits that prospective tenants of the area are likely to seek

Each of these research areas helps you home in on exactly the right investment that will offer the greatest return in both the short and long-term.

Meanwhile, research also involves being abreast of the costs associated with property investment and minimising them accordingly.

It’s about the individual

As strategy is all about timing, positioning and outcomes, it is also highly individual. And no two property investors are the same.

Their ambitions vary, as do their current financial positions, along with their future goals. That’s why property investing is never a one-size fits all endeavour.

Rather it should be tailored specifically to the individual, factoring in who they are, where they are now, and what they’re looking to achieve.

A property investment strategy is a business plan 

If you were to buy a business, you wouldn’t sign on the dotted line without analysing the figures, researching the customer, and examining the businesses’ strengths, opportunities, weaknesses and threats.

It’s the same when it comes to investing in property. You are running a business and the client is your tenant.

That means you need to plan for who that client is and how you can best service their needs. You need to also plan for how you will grow your business and capitalise on it when the time is right.

That takes planning, and planning is strategy. Without it, you are a ship adrift in a real estate sea.

Ready to get strategic?

At Property Friends, we’re all about the individual, and take the time to get to know you before developing a property investment strategy to meet your individual needs.

If you’re ready to get started on the property investment strategy journey, you can contact us directly here.

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Looking to understand the world of property investments better? We can help!

Uwe Jacobs Property Strategist

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