We all have particular styles, particular strengths and particular markets that we like to invest in. It is always sensible to play to your strengths to maximise your long-term returns but it is also vital to have a strict investment criteria. If you look at the worldwide property market there are opportunities aplenty each day and in reality it is not difficult to find one which fits your criteria. However, do you sometimes find yourself stretching your criteria to persuade yourself to acquire a property you like?
Emotion and investment don’t mix
It may seem a little harsh to suggest that emotion does not mix with investment markets but the reality is that you need to stay detached from your investments. If you see them as “boxes” then it is easier to buy and sell them without any emotional baggage attached. At the end of the day, you are buying property to sell or rent therefore you should not have any favourites. But does it always work that way?
Cold hard facts
When setting out in your property investment career you need to put together an investment plan and investment criteria for the future. This will ensure that your mind is as focused as possible, you have something to aim for and it can separate the wheat from the chaff. Once you start to let emotion, gut feeling and a desire to prove people wrong impact your thoughts, this is where it is very easy to move off target.
Stick to the facts and look at the property, the area, the price and your finances. What is your target sale price? What is your target rental income? It may seem very matter-of-fact but what is wrong in having a tick sheet when looking at any property?
Do not get greedy
If you have a figure in mind and you are offered this figure, even give or take a few percentage points, do not be greedy. Many property investors forget that it is only when buyers are around that it is easy to sell a property, once the markets are fully valued and buyers fall by the wayside it can be difficult to obtain the price you had in mind. Those who wait until the top of the market to squeeze the last pound out of their investments are taking a significant risk because at some point they will miss the top, the market will turn and they will be left with a property nobody wants.
Is there scope for flexibility?
There will be times when you are tempted to stretch your investment criteria to move into a different area. If this is the case then it actually makes sense to revisit your investment criteria and see if you can integrate your change in strategy. While you should stick to your investment criteria as much as possible that isn’t to say that you should not revisit your criteria on regular basis, amend and adjust.
Let’s face it, property markets change on a regular basis, trends come and go so it certainly makes sense to revisit your investment criteria on a regular basis. However, resist the temptation to tweak your criteria too often.