The 3 stages of failure in property investing… and how to fix them

Expert Advice with Ahmad Imam

If the key to success is about knowing when to hold ‘em and when to fold ‘em, how do you apply this to your property investment strategy?

Sure perseverance, hard work, determination are are all admirable qualities.

But when it comes to success in life – be it in your personal relationships, career, or even property investing – there comes a time when you must decide whether you should stick with something for the long haul, or accept defeat and move onto greener pastures.

Putting all of your energy into something that is doomed to fail and thereby “flogging a dead horse” is probably the least efficient and effective use of your time and money around.

If the key to success is about knowing when to hold ‘em and when to fold ‘em, how do you apply this to your property investment strategy?

Well, there are three areas within which you may experience challenges – tactics, strategy and vision – and within each there is opportunity to reassess and redirect so you achieve your goals.


1. Fine-tune your tactics
This is the how-to stage, where details and systems are incredibly important.

For property investors, this means having your paperwork up-to-date and pre-approval sorted, knowing your figures down to the last dollar, and always reading the fine print.

How much can you afford to borrow, and what kind of capital growth have your existing properties achieved?

This is where your calculator and analysis will become your best friend.

When you have a booming portfolio and a full-time job to juggle, this probably means employing one or more professionals to assist you with your tactics – think buyer’s agents or advocates, mortgage brokers and financial planners, along with a good accountant and a stellar conveyancing firm.

These are the people who’ll help ensure you’ve dotted your i’s and crossed your t’s, so you don’t get caught out in a silly mistake that could cost you thousands.

Remember, your tactics may change as your strategy, the property market and even the legislative landscape evolves, so you need to look back frequently and determine if tweaks need to be made to achieve the best possible results.


2. Pin-point your strategy
What is your current property strategy?

Are you focused on capital growth (my preferred strategy), or rental returns?

Does negative gearing form a large part of your plan? What about retirement and super?

Do you even have a strategy, or are you just winging it?

I see this more of this than I’d like to admit, and it’s the riskiest strategy of all!

There is no one “right” way to invest in property, as every investor and their circumstances is unique.

What’s most important is that you research thoroughly, and avoid sinking too much cash into your strategy until you’re sure it’s right for you.

If it’s not working out, don’t throw good money after bad in the hope you’ll claw back some capital.

Move on and try something new, even if it’s not the path you originally thought you’d go down. Successful property investors make business decisions, not emotional ones.


3. Develop a grand vision
This is your “why” – why are you investing in property? What do you hope to achieve?

It could be a comfortable retirement, or to help your own kids with a leg up in life.

Whatever it is, never lose sight of the reason you’re doing all this in the first place.

And most importantly, make sure you’re living your dream, not someone else’s. If private school isn’t on your radar, why are you saving for it? If holidays mean the world to you, make them a priority instead.

It’s your life, and your vision – and your property portfolio can help you achieve it.

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Ahmad Imam is a director of Metropole Properties in Sydney, is a highly skilled wealth strategist and a passionate property investor. He has a degree in Commerce, is a licensed estate agent in both NSW and QLD and has personally coached and educated hundreds of clients to create wealth through property.
He is a regular commentator for Michael Yardney's Property Update.



Disclaimer: while due care is taken, the viewpoints expressed by contributors do not necessarily reflect the opinions of Your Investment Property.

 

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