An old saying is: “when you don’t know where you are going you don’t know how to get there!”
How true is that?
There are a number of property investment strategies so a property investor does need to have a clear and defined focus on how they are going to make money with their investments.
To do this the best way is to write a Property Investment Business Plan.
Let’s look at the basics of a good business Plan when property investing?
An executive summary should be a summary of all you have written about in your plan. It is a quick overview of your thoughts, plans and goals for your property investing. Write it after you have finished the rest of your business plan and update it when necessary.
Give a quick overview of the market and an outline of the particular market that you are going to work in. It will help you stay clarified if you can detail right down to your postcode the areas that you are going to invest in. There should also be the details of the type of property that you are going to invest in, whether it is a 3 bedroom home, a 2 bedroom unit, inner city, on a railway, needs renovation and so on.
This section of the business plan goes into detail about:
• how you are going to buy
• when you are going to buy
• if you are going to renovate
• your requirements re your rentals
- your rental income analysis
- your thoughts on rental vacancies
- policies in relation to property management
Write down your strategies for selling under normal trading times and your strategies for selling in a falling or rising market. Are you intending to buy and sell in a short period of time, if so, give details?
• in this section list everything to do with your finances from current properties you own, their income, expenses, profits and losses.
• keep a sheet for each property that lists its details
• If you are going to take a salary from rental properties list this as well
• do projections for 1 year and out for 5 years
Long Term Goals
As much as you can, detail what you intend to achieve with your property portfolio over the years to come.