Don’t Peak Too Soon
The Best Way To Avoid Peaking Too Soon Is To Plan Your Property Investment
Unless you’re on a short-term buy-to-sell strategy, property investment is a long game to play. The rules of playing a long-term game means you need to pace yourself out. This is rather like the fable of The Tortoise and the Hare of which I am sure you will know: Over-exertion and misplaced confidence is a sure-fire way to lose the game whereas slow and steady wins the race. The reason why slow and steady is a winning strategy is precisely because pace is needed to withstand the course. The cyclical nature of the property market means that you will need to be prepared for the long-haul journey. This requires stamina and staying power if you are to sustain your resources across a long period of time.
The importance of timing in property investment cannot be underestimated. Those who time their transactions well are those who make the most money. Admittedly, trying to time the market is an incredibly difficult feat – however, with research and a dash of luck, it is possible. Having time on your side is a critical part of the game plan. It is often those investors who are forced to sell who end up losing. To remain in the game, you always need to ensure that you build in extra time. This also means that any mistakes you may make in your investment career would grow out. Time really is a great healer – even in the property market.
The best way to avoid peaking too soon is to plan your property investment well. That means calculating how long you intend to own a property and what you intend to do with it. It is about knowing your “exit plan” from the start and all the different stages of the investment. This is even more important when you are planning on buying a property that requires refurbishment. Properties can be refurbished to varying standards and, while the local market will dictate much of what you are required to do, it is critical you assess any planned works within the context of the bigger picture.
Not planning or failing to stage works over defined time periods, is an error I have seen made by many investors. To get the most amount of “bang for your buck”, it is advisable to plan refurbishment works for maximum impact. Therefore, if you plan to rent a property for the long term, it is wise to hold back on high-end finishes until you are ready to sell. Glossy worktops and designer taps can look very stylish; however, they are unlikely to add any additional value to the rent, and are all too likely to create even more maintenance issues!
Rental properties inevitably suffer wear and tear over the years and, within a remarkably short period, take on that “lived in” and “used” feeling – regardless of how much money was spent on the renovation. For example, carpets can quickly lose their original lustre and kitchen units soon collect a huge variety of stains. To regain the “premium” of a newly refurbished property and enhance the value of the end product, is the best practice plan and allow for additional improvements before placing it for sale. By doing this, you will ensure you maximise your investment – and get a top-dollar price for a “show home”.
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