It has been said, by a number of experts in property investment, that the biggest mistake one can ever make, is to do nothing.
Sometimes when I look at the Other Half I do think they are exaggerating. I see, sometimes, what could be regarded as a huge mistake, and at times I do wonder what I was really thinking when I jumped at that long-past request to “invest”, or JV, shall we say.
However the experts remain convincing. “Whatever mistake you might make investing in property, it will never be the biggest and most costly mistake you can make. Too often, new investors especially become overwhelmed or confused, and then do nothing at all. This is the biggest mistake.”
Figure out your budget
Consequently, experts advise that investors-to-be should figure out their budgets, know what they want to do ahead of time, and then do it. Buy something.
Of course when I was “on the market”, I didn’t strategise quite as much. There were certain considerations that I made from an emotional rather than a business perspective. And judging by investment experts this is indeed a mistake, whatever the actual, or perceived, state of the market at the time.
For advice has it that in every market there are opportunities. By looking beyond the obvious and finding alluring opportunities, investors can come out tops. And sometimes, in a depressed market, that’s easier as there can be fewer people searching for opportunities in a space where many only see problems.
It also seems, when I was on the market, I didn’t have, as they put it, a game plan. In searching for the perfect JV there seem to be a few almost universal necessities as well as a bundle of desirable qualities that are more and less important depending on the individual.
What is needed – and desirable?
Property investment is the same. In the end, in property investment, we all want to come out in a stronger financial position, but the other “desirables” are slightly more negotiable. For investors this boils down to selecting the “desirables” that complement the game plan, knowing what you want to accomplish beforehand, knowing what your goals are and understanding how you are going to achieve them within the context of the market. Investors-to-be need to ensure they have thought the whole investment process through and are clear about whether their goals are for example, cash flow, a retirement portfolio, a buy and hold, a fix and flip or a long term investment.
For if you buy a property, that does not meet your goals, much like a marriage, no amount of management can really fix the problem. Unlike a marriage, a pre-planned exit strategy is also a boon. Knowing how long you can afford to hold on to a property or what you’ll do if you go over budget really helps.
And last of all, before investing in property, cultivating an “asset owner” mentality is an asset. Take your investment seriously and expect those you deal with in related matters to take it seriously too.