Develop A Winning
Investment Property Strategy

What’s your investment property strategy?

I don't know about you, but the reason I invest in property is to make money. Period!

If you're like me, and you're in this for the money, then you're running a business. A business in investment property works exactly the same way as any other business.

Normal business principles apply.

I'm going to assume that you're interested in buying and selling investment property as a business in order to make money. That means we need to get the business principles in perspective and remember a few basic investment maxims.

You need to begin by asking yourself a few fundamental questions:

• What are you seeking to actually do?
• What are your long-term goals?
• What are your aims?
• How are you going to finance your deals?
• Are you after income, capital growth, or both?

In buying and selling investment property, each individual investor has a different goal and strategy. Nevertheless, on viewing trips, I've seen people fall for sales pitches for sexy new deals time and time again. Don't fall for this trap!

First of all, determine what your investment property strategy goals are.

Basically, there are four options to property investment:

1. Flipp property to make a profit on the sale
2. Buying development Land
3. Invest in income-generating property in the buy to let and commercial property markets
4. Invest in property development companies to sell to end users

Once you've decided which investment property strategy is best for your particular situation and goals, refresh your memory of these business maxims.

If you need advice about managing money, you go to a bank manager. After all, doesn't the bank manager manage money all day long? Look at all the money that's in the bank.

If you want to avoid paying horrendously high taxes, you go to an accountant. Isn't that what accountants are for?

If you need property investment advice, you go to your local real estate agent. After all, they should know where the best investments are located.

A good solicitor will know the law well, but by and large, a solicitor is generally completely useless in a professional capacity.

How many times have you gone to your solicitor for help and then learned that he or she has to get expert advice from a barrister. Who in their right mind goes to get advice, only to find out that the potential advisor has to go to someone else for more advice? The solicitor then passes on the third-party information to you, charging you exorbitant fees for this "service".

Similarly, the bank manager is not a bank employee whose job is to manage money. Rather, the bank manager’s job is to manage the bank – not your money.

As for the accountant, he or she has learned how to complete tax returns and present accurate accounts. But the accountant is not skilled in using the rules to your best advantage. Accountants won't tell you how avoid paying taxes, nor provide advice about the best way to run your business. You'll have to go elsewhere for that advice.

And your local real estate agent doesn’t know how to get the best return for your money. Real estate agents are in the business to sell property, specifically whatever properties they happen to be marketing at the time.

So, remember these four simple points:

• The bank manager’s job is to manage the bank, not to manage your money.
• A litigation solicitor is merely a well educated secretary.
• An accountant is a designer who has good presentation skills.
• Your local real estate agent is a sales representative and doesn't give a DAMN about YOUR investment goals.

On the other hand, overseas property magazines paint rosy pictures of owning a property investment abroad. Remember, these publications are in the business of selling good news, as they rely on advertisers to pay their salaries. So take their recommendations with a grain of salt.

Take my advice: don't put your faith in these quasi-professionals and media resources. To keep up–to-date with the latest trends in the property market, regularly check or subscribe to the following resources.

• The Royal Institution of Chartered Surveyors This is the leading source of knowledge related to land, property, construction, and the environment.

• Collierscre One of the top ten real estate consultancies in the world.

• Knight Frank Residential and commercial property professionals.

• Estates Gazette This magazine provides detailed information about trends in commercial property.

Once you've researched your topics of interest, visit the place and carry out your own market research. Speak with the local real estate agents and rental management companies. They'll be able to advise you on the best local options for your investment property strategy.

Also, have a friendly chat with local shop owners and members of the business community. After all, if these people are investing in their own area, they must have reasons for being confident in the local investment property market.

In the end, it all comes down to what you want. Once you have a clear strategy, then do the maths to find the most profitable way of investing in property.

Return from Investment Property Strategy to Home Page

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