How to Discover Your Ideal Property Investment Strategy
By Mary Waring
There are a number of different ways of generating wealth from property. For example, maybe you want to buy for long-term capital growth or maybe you want to achieve monthly cash flow. Depending on which strategy you choose, the type of property you will need to achieve this strategy will differ.
The following are all different options to consider:
* Buy to let income i.e. generate a monthly income with rents in excess of costs
* Buy to let capital: monthly cash flow is flat, but the investment has the potential for significant capital growth
* Buying a distressed/repossessed house at undervalue
* Back to back trading i.e. Buy and sell within a short time frame to make a profit
* Investing abroad
** The Best Option? **
Which option is most appropriate will depend on your personal circumstances, your current position and where you plan to be in 5, 10 or 20 years time.
It’’s not a case of one-size fits all. So don”t assume you need to have the same strategy as everyone else. Property investment is a long-term plan and you should consider holding the property for at least 7 years (unless you are buying, doing it up and then selling within a short period).
** Time is Money **
You need to consider the amount of time you have available to devote to this venture. So it’’s no use considering buying a distressed property and doing it up, if you know you will not have the time to do the renovation work and will not have the cash to pay someone else to do it for you. Whilst this is a great property investment strategy, it isn”t necessarily a good one for you.
So before rushing to the local estate agents telling them you”re a property investor, and asking what they have available on their books, do have a think about your long-term strategy. And then, having set your strategy, only look at properties which meet it.
** Flexibility **
You should of course be flexible with your plans but when you”re targeting your next (or first) buy to let you need to know what your criteria are or you won”t have any means of comparing different properties with one another.
If you are, one day, looking at a distressed, under market value property and then the next day looking at a capital growth property there is no way to determine which of these two properties will most meet your needs.
You should consider your property investment portfolio to be a business (even if this is your first purchase) and as such you should run it as a business making relevant goals and plans. Do not just view as many properties as you can fit in within one afternoon and hope for the best.
Use the property investment calculator available when you signed up, to work out your return on investment for different criteria and then use this to determine which property meets your needs and will move you towards your long-term goal.
This will keep you on track to purchase the type of investment property most appropriate for you.
About The Author
Mary is the founder and MD of Mary Waring Associates Ltd, set up in response to the number of people she met who wanted to acquire a residential buy to let portfolio. Find everything you need to about buy to let property on the Mary Waring website
Mary is:
* a successful property investor
* a highly experienced independent mortgage adviser
* a Chartered Accountant with experience as FD of a property company
