Property investing remains one of the most lucrative ventures, but only when you get it right. Anyone with spare cash can build a property portfolio, but not everyone is guaranteed success.
If you want to get the most out of your property investing projects this year, there are a few things that you should focus on. We’re covering everything to keep in mind in this guide.
When you’ve got your eye on a property, make sure you have clear goals in place from the start.
Having vague intentions like “make a profit” might be enough to motivate you, but they won’t help you establish a clear path to success. It’s smart to set specific targets when it comes to things like rental yield or resale price before you commit to a deal. That way, you can stay focused and measure your progress more effectively.
Delays to your renovation projects will cost money. If you’ve got your fingers in lots of pies, you’ll want to have a trusted team of contractors that you can use for every project, following a clear schedule and avoiding scope creep.
The faster you finish, the sooner you can start earning income or flip the property, and the faster you can pay off loans (more on that below).
Assuming that you’re not buying a property with cash, you’ll probably need to look at the best financing solutions for property investing.
Nine times out of 10, traditional financing will slow you down. Many property investors choose to use hard money loans for faster access to funds, especially as these enable you to secure promising properties before your competitors do. Just make sure you work with reputable hard money lenders and that the deal supports the higher interest costs you’ll need to pay.
If you’re the sort of person who wants to try it all, you’ll be tempted to switch between flips, rentals, and developments in your property ventures. But keep in mind that taking on too much at once can slow you down, not to mention scatter your resources.
The sensible option here is to choose just one strategy that fits your goals and stick with it, so you can enjoy more consistent returns. Of course, this depends on how much cash you have to work with—you may be able to take on multiple projects as your business grows.
Finally, you should always know what you intend to do with a property before you spend your money, especially if you’re financing your project with a loan. That means having a plan to either sell, rent, or refinance.
If the numbers don’t work for your planned exit, that’s your sign to walk away. Planning a clear exit strategy will help you avoid poor returns. [NG-FA]
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