Staying on the upward journey to increasing and secure wealth via property investments is easy – but it’s hard work too. What do I mean by this? Well, I have a number of pointers that will help you stay on the right track and hopefully, keep your feet steadily moving up that ladder you have chosen to climb.
- Pointer #1 – you have to have a plan: There is no point in even trying to invest in property without a well-thought out plan or strategy on what you want to achieve and the route you need to follow to get there. It helps to have goals for the next five, ten and twenty years. This keeps you focussed on the vision that you have and it also helps to measure how close you are to achieving each milestone.
- Pointer #2 – don’t think you can do it alone: The most successful property investors have specialist teams that support them, experts in various fields whose knowledge they can draw on before making decisions. They also don’t just hand over the reins to someone to do it all for them – that would be irresponsible. No, they use the team around them, all the time gleaning more and more knowledge themselves so that the ultimate decision, when they have to make it, is theirs and they sink or swim by that. But those who have the best teams around them – swim very well indeed.
- Pointer #3 – you have to do your homework: Research is absolutely vital to your property investment success. It is common for people to invest in properties that ‘fit their comfort zone’ by purchasing units close to where they live themselves or because they “fall in love” with it. I have mentioned in another article that your property investments must not become something to which you’re emotionally attached. That’s a dangerous way to use your money because decisions you make can be clouded by feelings that can impact your measured judgements in how you make your investment strategy work. Cold, hard research and due diligence need to be executed to ensure that each investment property is the best that meets your game plan to moving up that ladder.
- Pointer #4 – step back and take in the big picture: How do you take a virtual step back? By making constant and unemotional reviews of your property portfolio. This is where your team of advisers and specialists come into play too. It is at this time that the hard questions are asked and answered: Is it still earning what I need it to earn? Where are we in the property cycle? What further potential does this property have for me? Is it time to consider selling and moving on to a better prospect? Should I keep it, refinance and look for another investment to add to this one? Your advisers will be able to give you all the information you need to ultimately make the decisions that will keep you moving towards the independence and security you seek.
- Pointer #5 – it’s not a ‘get-rich-quick’ scheme: I’m sure you realize the difference between a ‘bargain’ and ‘value for money’ and that ‘goedkoop is duurkoop‘ (penny-wise, pound-foolish). How anyone expects to purchase a property just because it’s ‘cheap’ and then do minimal touch-ups and flog it off as an investment property is beyond me and indicates that the homework needed in selecting the right property has not been done. Are you a contractor in the property development business? Or are you selecting good value properties that will build a property investment portfolio for you?
- Pointer #6 – don’t think that careful property investing is ‘risk free‘: I have seen some solid investors disregard the risk element in property investment where they could have just managed it more effectively. There are a myriad of ways to minimise risk in property investments – having the correct ownership structure or financial cushions in place is part of the planning. Efficient tax planning and utilisation of trusts also play their part in protecting an investor against the risk of possible loss or depreciation of value.
Carefully managed properties with the right team to back you up can ensure success in this exciting and rewarding field of property investment. It’s a great vehicle that South African investors can use to create personal wealth and financial independence.
IGrow Wealth Investments offers the very best advice available to help you make decisions on how your money needs to be employed. For advice and guidance, we provide the independent specialists who are the right team of professionals that gives IGrow the track record of success, integrity and security that you want.