There’s no question that the right investment property is an incredible financial opportunity.
Whether you purchase a residential or commercial property, tapping into its potential, such as renovating and then renting out a space, can help you generate passive income and even turn a nice profit when you sell or long term income and capital growth.
However, you shouldn’t just buy the first property you come across that looks interesting. Instead look at the numbers and do your homework. The best way to reduce risk is to know the cards on the table.
We aim to deliver much needed capital for SME’s and Property Developers.
Your Investment Objective or Desired Outcome #1
The most important thing is to keep in mind why you're investing in the first place.
- Are you investing to have more passive income that will allow you financial freedom and the choices that come along with it? Or
- Do you want to build capital therefore, focus is capital growth Or
- Do you require both income and capital growth?
Whilst there is no wrong answer, clarity on objective will determine what and how you invest in order to accomplish your end game/ goals.
"All that glitters is not gold" Location, Location, Location, Research, Research, Research – KNOW THY MARKET
Micro & Macro Economic Trends, Market Drivers & Influencers #2
Understand what market demand your investment is there to serve.
From there you can start to build an effective analysis of the key factors of price per square foot or square meter, the in-place rent versus expenses on that same basis to establish a margin and, lastly, how that margin effectively ties into your target yield and over what time frame.
Disposable Cash to Invest - Your Personal Financial Situation #3
Disposable Cash to Invest - Your Personal Financial Situation #3
Each person's personal financial situation is different and investment properties generate unique financial outcomes.
- Some might require smaller investments and incur fewer costs along the way, but produce little to no ongoing revenue for a while.
- Others will require larger upfront and ongoing investments, but will generate greater cash flow right away.
Community Considerations And Regeneration Investment Areas #4
Community Considerations And Regeneration Investment Areas #4
Return on investment is the most important factor for most property investors and developers. Investors and developers must however be prepared to answer important questions that stretch beyond their own monetary returns like benefits to the community and society in general.
Considerations such as
- Amenities
- Energy efficiency etc.
Anticipation of Market Cycles & Preparedness #5
Anticipation of Market Cycles & Preparedness #5
When considering an investment property, while it is important to confirm the property meets your cash flow and investment criteria, as an investor the best thing to keep in mind is how you can strategically reposition the asset to increase your returns and be prepared during downturns in the market.
Real estate is one of the best asset classes to build wealth and maintain wealth through the proper use of debt and leverage if managed well.
Your Real Estate Ultimate Strategy and Objective #6
Clarity: Know what you want your end result to be and this will guide your investment decisions.
- Cash flow
- Capital Gains Or
- Both Cash Flow and Capital Gains
Know your strengths and your weaknesses and build a team around you. Business and investing is a team sport.