When you start out with your investments, you’ll probably develop an investment property strategy that you’ll stick to rigidly (we would hope!).
But as you begin to build up your portfolio, there’s very little for you to do except watch your wealth grow. The longer you invest, the faster you accumulate wealth. You need to reinvest quickly, buying multiple properties at a time, all while mitigating the risk.
It’s at this point that other investment opportunities might start presenting themselves and you’re most at risk of deviating from your plan. Below, we explain why it’s more important than ever to stick to your property investment strategy.
What Does a Property Investment Strategy Look Like?
You can choose from any number of investment property strategies, based on your needs, interests and circumstances. A strategy will help you build a successful property investment portfolio based on data, not emotional decisions. Sticking to your core objectives will help you achieve good returns.
But how do you create your own strategy? By using what we here at OpenCorp have termed the “Mirror Man approach”.
What Is the Mirror Man?
The Mirror Man is a way to set your goals and ensure you stick to them. It came about after Al Lewison veered from his own strategy to investigate investment opportunities in the US early in his career.
To stop himself from deviating from his original property investment strategy, he wrote a list of goals on his mirror. It was there morning and night to remind him to keep to his strategy.
Your Mirror Man goals help you set an objective, a time frame, and a rationale, along with your own personal statement to help guide you. It could look something like this:
What? Own X properties
When? In X years
Why? To gain financial freedom
What am I going to do? Focus on property growth.
As new investment opportunities arise, the Mirror Man can help you judge whether they are in line with your strategy and whether they will help you take another step towards your end goal.
Why Should I Stick to My Strategy?
When you start to build up your equity, you’re going to receive plenty of different investment opportunities, whether that’s a business, shares, an acquisition, or what have you. You may be tempted to switch tracks or invest everything you’ve got for the next big win.
But the likelihood is that you’re not going to know these investment strategies as thoroughly as you know the one you’ve developed and followed successfully thus far. You’re almost inevitably stacking straw and risk losing substantial wealth.
In essence, it’s not a bad thing to stick to what you know, especially in the beginning. Once you’ve accrued substantial net worth, then you can consider trying other investment strategies.
But for now, it’s OK to let opportunities pass if they don’t fit into your strategy. And if you’re still not sure about your strategy, it may be best to seek some expert advice before you get started.