16 Oct What to Include In Your Investment Plan
Without a plan in place, how will you know what to do and when? A robust investment plan lets you see the big picture, know why you are taking certain actions, and enables you to make smart choices as a result. Here is what you need to include in your investment plan –
In order to keep on track, you need timeframes for when you will take actions. At what point will you purchase a new property? Do you have a plan to sell property, or will it continue to build equity until it can be leveraged into another property? It quickly becomes obvious that without proper timeframes in place, you end up with an ad hoc strategy, and as a result reactive actions. As a property investor, the last thing you want is to be making decisions without intentions.
Alongside your timeframes, should fall investment criteria. Understanding how to gauge a good investment is one of the cornerstones of growing wealth. It means you can analyse an investment quickly, and make a decision to purchase, or not. Have you ever noticed that good investors seem to magically sense whether a certain property is worth purchasing or not? They simply have memorised their criteria, and can reference it against any property on the market. Imagine, a robust criteria means that you can ask a few questions and make an educated decision.
A good business plan includes a swot analysis. Swot stands for strengths, weaknesses, opportunities and threats. An investment plan should include any potential challenges, and strategies to overcome them. It’s not enough to hope that everything is going to work out brilliantly, and professional investors make sure they have awareness as to what could happen, and strategies to work through a worst-case scenario stop best of all, it helps you sleep at night and not worry about what could happen.
A Portfolio Guide
Your portfolio guide shows your current properties, as they relate to the overall market and your future portfolio. For example, if you have three houses that are low-slung bungalows in suburban areas, you may create an empty space in your portfolio guide for a future property that is in a rural area, or city based. This way, you can create diversity in your portfolio, if this is something that is important to. A portfolio guide enables an investor to intentionally grow their stable of properties, rather than reacting to availability. If another low-slung bungalow in a suburban area that worked with your criteria became available, you could elect to forego it and pursue something else.
Your investment plan is an ever evolving document. The more you use it, and the more you improve upon it the better your wealth creation future is likely to be