As we all know, the key to successful property investing is to find ways to minimize risk while maximizing the rewards. Music to the soul, that sentence =)
Let’s take a common end goal that all investors aspire towards. That is procuring high income-generating property that provides consistent and predictable cash flow in the long term.
Cash flow is the total money left over after collecting rent and paying running costs from that rental income you receive.
Of course, the risk of a tenant vacating or rent running flat is there, but more extended holding periods and guaranteed rent schemes help to minimise such risks.
Most successful investors assess the risks on a superficial level and use these strategies as their baseline to keep them growing.
1. Where is the Property Located
When you set up your property investment strategy in a prime location, you will have to pay more, which also translates to the investor having a lot more profits down the road.
However, if the investor picks worse neighbourhoods, though the cost will be lower, they might later run the risk of a lack of demand, lower rents, and lower prices.
Remember that while the location of your property will account for around 80% of its performance, it’s also necessary to own the right property to suit the local demographic.
2. Demographics Drive Markets
When we talk about demographics, the population size, lifestyle, income, and preferences will be more critical in shaping up our property markets than fluctuating interest rates, consumer response or government inputs. So focus on your target market and set up a business strategy accordingly.
3. Property Investing is a Game of Finance
Understand that property is a long-term pay-off. You have to calculate financials for every success and setback. You need well-analyzed plans to help you override the property cycles. Also, invest in your business, such as boosting advertising and marketing campaigns to improve your monthly cash flow.
Keep at it and continue building up your portfolio.
4. Smart Planning
Have a short, mid and long-term plan for the money you earn and re-invest it into your property portfolio. Use it to pay off bills and debts, of course, but keep re-investing. Strategising ahead provides the framework to help you take action and avoid common mistakes. As you learn how to market your deals in-depth, you will understand how to promote your services and solicit sales.
5. Build a Strong Portfolio to Gain Mastery and Financial Freedom –
When all is said and done, the main aim of ambitious property investors is to set up many profitable investment units like R2SA’s and HMOs to keep multiple sources of income flowing in. This way, you will gain mastery in this chosen profession and carve your path to financial freedom from setting up so many wise investments.
Positive cash flow is essential as that is the money used to pay bills and expenses, especially for things that can help add value to your property. When profit comes in, that means your investment is going smoothly.
Growing together is inevitable with dedication, an analytical mind, and the willingness to connect with the right people.
At P&A Property Sourcing, we manage all the complicated tasks from beginning to end.
You can start seeing results in the first week with our investment strategies. You will get back your capital investment in 6 months and 4X your investment in 3 years!