It is all good and well negotiating the best deal for a new property investment but how do you know when to sell, take a profit and walk away? For many people selling is one of the more difficult areas of property investment because once you have sold that is it, you crystallise your profit/loss and move on. There are a number of ways in which you can set yourself targets and potential selling levels allowing you to sell up and walk away.
When you acquire any property you should have an exit strategy in mind whether this is short, medium or longer term. It may be that you decide not to sell the property in the future but in theory you should have some kind of plan in mind. Without a target it can be easy to get carried along with a fairly static portfolio meaning that you could miss out on other opportunities. We are not suggesting you should actively buy and sell your property assets but there will come a time when trends change and perhaps your funds could be better used elsewhere.
Have a figure in mind
There are two emotions which dictate the direction of investment markets which are fear and greed. While they can be useful if used correctly they can also decimate your portfolio if you let emotions run wild and detach yourself from cold hard statistics. At the end of the day there is no chance that you will sell at the top and buy at the bottom of any property market therefore a few percentage points either way will not necessarily break the bank.
Regularly reassess your plans
Trends change, financial situations change and it is therefore highly recommended to regularly reassess your investment plans. It is worth remembering that everything in the world of investment performance is relative, relative to the underlying market and any other barometer you want to add to the mix. There are more than enough instruments you can use to compare and contrast your property investment performance but ultimately if you can outpace inflation and maintain long-term forward momentum then you won’t be doing too badly.
Reinvesting your funds
At any one given time there will be a whole host of potential property investments for you to look at. Once you have sold an asset it can be tempting just to roll that money over straightaway into another property. This need to be fully invested can be dangerous because there is nothing wrong in taking your time, doing your research and trying to perfect your investment timing. Even when you are fully invested it can be useful to keep an eye on new trends and new potential investments which may be added to the mix once you have capital available but there is no need to rush.
For many people buying is the easy part, it is selling which can be difficult to time correctly. You need to have an exit strategy in mind from day one, you need to be flexible with your selling levels and member there is no rush to reinvest once proceeds are available.