There are certain fundamental principles that simply cannot be compromised when it comes to property investment. This is a view widely shared by the most successful real estate investors. However, sometimes, you also have to show a little creativity to make headway in your property investments. Here’s a brief look at creative property investment know-how.
1. Gain knowledge
In any discipline, field or project, nothing is more crucial than gaining knowledge. When you take the time to educate yourself and do thorough research then you are most likely to succeed. Whether you are putting your money into companies, properties or ideas, don’t invest in anything you don’t understand. Simply put, if you know what you are doing, you are reducing your risk.
The more knowledge attained, the less likely you are to make poor decisions. This starts with educating yourself about property investing in general. Understand the principles of leverage, cash flow and investment yield, and set yourself related goals.
2. Run investments as a businesses
Do not think that property is a passive investment. To maximise value, you need a business to guide decision making process. From there, you can get into the specifics of where and what you want to buy. This should translate into you gaining a more profound appreciation of the market.
One way of being more successful at property investment is to specialise. Although it might limit your opportunities, but it drastically increases your chances of making informed and profitable decisions. You stand a better chance of good returns if you focus on a particular kind of property in a specific area.
3. Formulate an exit strategy
It is also critical that you never buy a property without also knowing what your exit strategy will be. This process is simplified and better facilitated by clearly defining why you have added a property to your portfolio in the first place. This serves as a yardstick to clearly evaluate when the property no longer meets your criteria.
In addition, don’t get tied into underperforming investments.Be prepared to walk away and realign your capital elsewhere if a property:
- is no longer delivering your desired rental yield,
- or something has fundamentally changed in the market.
4. Build the right network
Finally, remember that you can’t know everything so surround yourself with people who can add value. Amoung those critical to have as part of your arsenal are,
- A good attorney,
- a knowledgeable accountant,
- informed estate agents and
- a smart tax specialist
These specialists can advise you on the most efficient ways to run your property portfolio. Thus helping to ensure that every decision you make is prudent and based on the right information.
