Property investment is like any other business venture. You wouldn’t start a restaurant without a business plan, and you shouldn’t be investing in real estate without having a plan.
Planning could be the difference between making a killing and permitting a disaster. Writing clear goals and a blueprint for success is the best way to mitigate problems and make the most of your venture.
There are many different ways to invest in property, and with everyone having a different interests and approaches, you’ll need to have a plan that suits your individual needs.
These are the top points you’ll need to consider when writing your investment property business plan, so you’re sure of success.
Your Property Investment Business Plan
Figure out Your Financial Goals
Have you actually written out your financial goals? It may sound simple, but having financial goals and sticking to them is essential to investment success. It will help prevent you make quick judgements or investments based on emotion rather than reason.
Your property investment plan should include a detailed outline of the amount of income you intend to earn from each investment, along with a realistic timeframe of actions and goals.
How Much You Will Need to Invest
Your financial goals are worthless unless you’ve also plotted out expenses, and how the price of each house affects your bottom line.
Determine how much income each property should generate, factoring in such expenses as interest and repayments, agent’s fees, and insurance.
With multiple properties, figuring out income and expenses will help you to determine how many properties you’ll want to own at any given time in order to see a substantial profit.
Analysing & Planning for Your Investments
Investing in property is a business, and emotions have no place in business. Don’t choose a house in your hometown out of nostalgia, and don’t make plans to update interiors to suit your personal taste.
You have to detach yourself; buying an investment property is nothing like buying your own home. One is personal, the other is business.
When coming up with your property investment business plan, it’s important to make sound business choices. Choose the location of your property purchase by looking at areas that are seeing growth. It’s all in the numbers.
Analysing the housing market, and looking in detail at the location of your potential investment property will help you to determine whether it’s the best choice to help you reach your financial goals (see above!).
Plan Your Sales Strategy
Plotting out your sales strategy before you get involved with property investment is a better way than trying to figure out when to sell on the fly.
After you have analysed sales data, and growth projections for the suburbs, consider how and when you should be able to sell your property to make the most of your investment.
Having an exit strategy will help you be better prepared in the case of a rise or stagnation in the market, so you don’t make any quick decisions based on emotion.
Include a Brief Executive Summary
This is a short summary of everything you have included in your business plan. It provides an overview of your plans, and what you hope to achieve by investing in the property market.
Write it at the end of your business plan so you can be sure it properly represents everything you have decided on, and all your goals going into a new investment.
Learn more property investment tips on the OpenCorp blog today to help build your portfolio.