03 Feb Planning In Real Estate Investment
Through effective planning, we do our best to minimise potential variables and give you the best possible chance of achieving your desired outcomes. However, as everyone knows, every investment contains an element of risk and it’s important to understand that your investment strategy is not set in stone. One of the key components to maintaining a balanced portfolio is an element of flexibility. For example, if there is a short-term artificial spike in the property market, it may be beneficial to sell your property holdings in order to capitalise on this, reinvesting in property elsewhere, or holding off until the artificial bubble pops.
From a negative standpoint, natural disaster and global economic turmoil can impact property values, both from a positive and negative standpoint; so plans to sell, or hold should be fluid, and not contingent on ideal scenarios.
The crucial question to ask yourself is, “What will I do if…?” This should be based on your perceived plans, for example, the date you wish to exit a property or liquidate your portfolio as a retirement strategy. If this is not viable, do you have a backup plan in place? If not, you are relying on the – admittedly likely – status quo being maintained, and your portfolio not being affected. Through setting up contingencies, and having a backup plan in place, not only can you enhance the effectiveness of your investment plan, but also reduce stress, and open up potential opportunities.