Before you can establish a property investment strategy, you need to define your investment goals. Decide whether you want to buy and hold properties for the long term, or if you’re planning to sell as soon as there’s a profit to be made. As you put together an investment strategy, remember to work with experts who understand the local real estate landscape and its financial implications, and can help you make wise decisions.
Property Investment Strategy: Review Your Finances
The first step of your investment strategy should be deciding how you’ll acquire your properties. You’ll need to take a look at where you are financially. It’s a different process when you pay for homes with cash versus financing. Leveraging your buying power with loans can help you bring more properties into your portfolio, but you’ll also assume more risk. Paying cash for an investment property gives you instant equity, and cash flow will be realized right away. However, you’ll be spending a lot of money up front, and that may leave you will little cash in the reserves for maintenance and other expenses. Review your finances and strategize appropriately.
Property Investment Strategy: Choosing Assets
Part of your investment strategy is deciding what kind of properties you will invest in, and where you will buy them. Think about whether you want to buy an apartment building, single family homes, or a mix of different property types that might include condos and duplexes. The types of properties you decide to invest in will dictate how and where you invest. You’ll want to seek out locations that will provide you with a great pool of tenants and the opportunity to increase the value of your investments.
Property Investment Strategy: Planning Your Exit
Most investors aren’t thinking about their exit strategy before they purchase a home. However, it needs to be an important part of your investment strategy. Think about how long you’ll hold onto an asset before you buy it, so you can estimate how much it will earn for you in the short term and the long term. Look at the whole of your portfolio and put together a timeline.
Once you begin building your property portfolio, you’ll need help with central Florida property management. Don’t wait! Getting help before you begin buying property will help you be a more successful investor.
Contact us at Legends Realty if you have any questions or need any help.
