Have you ever considered planning your investment goals shortly, say, in the next 10 to 20 years?
If this has not crossed your mind, you may need to start considering your investment option to help you become more financially prepared in the future.
Planning for wealth creation is surely something that you need to consider, especially when you want to become more financially stable or be able to put your money to good use and not just get it and see it gone.
One of the most promising and lucrative investment options can be found in real estate. While it may sound like a capital-intensive venture, a properly managed real estate investment portfolio is a high-profile investment option to seriously consider.
However, the key to a successful and productive investment is by careful and thorough planning, as well as employing strategies to help you sustain and gain from your investment assets in the next 10 to 20 years, even longer.
Determining your investment goals
Remember that there’s no such thing as a one size fits all solution to investing because there are a lot of factors at play such as your level of involvement as an investor, capitalisation, nature of the investment, etc.
However, defining your goals and planning your investment strategies is critical especially if you want to achieve your goals.
If you are an investor who has built your portfolio and thinking about how to consolidate debt in the next 10 to 20 years, now is the best time to seriously think about it.
Many investors often make the mistake of focusing too much of their attention on accumulating investment properties and end up neglecting loans, mortgages and debt needs to be paid off. Sometimes it gets sidelined and begins biting back when you start getting collection notices and foreclosures.
Prevent this from happening by taking stock of your asset inventory and ensure that you don’t go way over your head in managing your assets.
Always remember to factor in your liabilities as much as you do with your asset accumulation, that way you do not end up getting shot in the foot.
Take advantage of a low-interest-rate environment by keeping yourself updated and reviewing your loans and refinance, if necessary so you can achieve your financial goals sooner.
Make the most of low-interest rates by servicing principal and interest repayments so you can stretch the value of your money.
As you reduce debt on your investment loans, you generate better cash flow and ensure faster returns on investment.
Another great strategy is to reassess your investment productivity by reviewing your income versus your outgoings, such as determining if you have maintained your utility spending or has it increased due to outdated facilities and insurance premiums, among others.
Reducing your spending on things that can be remedied or adjusted within regulations can add in to your cash flow to pay up your investment portfolio quickly.
If you are new to the property investment game, always think about how you approach your investment goals.
For instance, a long-held traditional practice of purchasing multiple properties each year is no longer a very promising proposition.
Instead, new investors must consider aiming for realistic and achievable goals whether it be purchasing two, three or four investment properties in the next ten years then focus their attention on it. Don’t spread your wings too thin, lest you fall.
For instance, you may consider purchasing investment properties within the middle rings of progressive cities such as Melbourne or Sydney in your first year or two, just so you can start building the foundation for your investment portfolio.
Brisbane may not be as fast-moving as Syndey or Melbourne, but it does provide a steady market for premium cash flow, so this is another option to consider.
Other areas include Adelaide and Perth, so make sure to craft your strategies well.
When planning for the long term, dedicate your first half of the timeframe for asset accumulation, then dedicate the last half for debt consolidation and planning your strategies such as minor developments, renovations so you can create additional cash flow and capital growth.
Make sure your assets do not end up as liabilities
In the past, people used to brag about the number of properties on their portfolio, without realising that some purchase decisions were not made judiciously or with much diligent consideration.
Nowadays, it is more important to establish a portfolio of fewer properties that provide the most lucrative and productive returns, especially in terms of capital growth and optimum cash flow, which are tuned to your financial goals.
To ensure that your investments are worth their weight in gold, make sure that you are realistic and practical about your wealth-creating targets, as well as acknowledging your debt obligations.