PUTTING THE NEEDS OF YOUR PROPERTY INVESTING BUSINESS IN PERSPECTIVE
Every business needs a plan. As an investor in commercial property – no matter what your other commitments – it’s important to see your investing as a business also, and develop a plan accordingly.
Start with a business plan
Going through the exercise of putting together a well-defined business plan will give you direction and focus.
Start with your goals. What are they and how are you going to achieve them? What steps will you take and how long will it take to reach each goal?
What strategies will you use to achieve your goals? Will you focus on building a solid portfolio based on rental return or are small developments the way you wish to go.
Let’s say your aim is to achieve a certain income in retirement and you have 10, 15 or 20 years to achieve it. How much wealth do you need to accumulate in this time in order to realise your goal?
Having an ultimate goal in mind, writing it down, and reviewing your progress towards that goal on a regular basis will keep you focussed and on track.
Do the numbers
Go through your financials carefully and do the numbers. Know your cash flow requirements, maximum borrowing amounts etc before taking each step in building your portfolio. Keep emotion out of your investing and stick strictly with the numbers.
Having your finances in order and regularly updated also means you will be ready at a moment’s notice with all the information you need to secure financing when you spot a great deal.
Make the time to establish good relationships with real estate professionals in your chosen area, including agents, valuers and mortgage brokers. Let them know your aims and what you are looking for and news of a viable property might just reach you before it hits the market.
Develop a great team
To succeed in property investing, you need to be surrounded by professionals you can trust. Your team will include a solicitor or conveyancer, brokers, agents and an accountant. Make sure they are the best in the business.
The other member of your ‘team’ should be a mentor with solid experience and success in commercial property investing behind them.
Put your exit strategy in place
Before purchasing an investment property consider what you would do if you needed to sell it in a hurry. Markets shift and unforeseen circumstances happen so always be prepared for the worst. Have a buffer amount set aside for each of your properties to ensure you are able to weather any storms that could impact your personal income or investment portfolio.
Take the time to go through this process before the end of the financial year and by the start of the 2017/18 financial year you will be able to look back and clearly see how much you have accomplished.