There is no doubt that property investments are nowhere near as volatile as for example stocks and shares but there is still a need to review and adjust your property investments accordingly. In a perfect world each of your property investment should be entered into on a long-term basis with a clear exit strategy. However, there will be situations where markets move, situations change and it may be sensible to re-evaluate and adjust your assets.
Monitoring your property investments
The Internet has given a whole new insight into the world of property market movements with information readily available at the touch of a button. In years gone by it was often difficult to get up-to-date property prices, property movements and a general consensus on future trends. However, the Internet which is basically an information exchange offers a very interesting and “fluid” look into the world of property investment.
You should keep a constant eye on your property investments, market movements (both locally and nationally) together with the local and national economic situation.
As we have seen over the last decade markets can change direction very quickly as the economic situation altars. We only need to look at the property market just prior to the 2008 US mortgage led crash to see investors pushing prices to the limit. Once the US mortgage crisis became clear we saw many property investors taking profits and buyers disappearing into the wilderness. Looking back, maybe that was the time to jettison some of your property assets, take a profit and keep funds on deposit to fight another day. However, hindsight is a wonderful thing!
While it was obvious that the US mortgage crisis was a real challenge for investment markets and economies around the world, who would have guessed how far they would fall? You do need to keep an eye on local and economic news, stock markets often offer a good lead on future trends and where applicable act accordingly.
Is cash still king?
In times of trouble and economic woes cash is most certainly king even if, in the current environment, the rate of interest on savings is minimal. When the worldwide economy turned in 2008, and property prices followed, it was perhaps a sign to reduce property exposure. It would have taken a brave person to sell all of their property assets because, once you have liquidated your investments into cash, you then have the next problem, how and when do you buy back into the market?
Look at the long-term picture
The key to successful long-term property investment is exactly that – maintain your long-term strategy as long as the key components supporting your strategy remain in place. If you believe that the long-term situation is changing then you need to re-evaluate your property assets and take action. You should evaluate particular assets on the day as opposed to being influenced by buying/selling opportunities missed. We’ve all seen those investors who hold onto a property because they missed the best selling price only to see their asset continue to fall in value. This type of action (or non-action) is based upon emotion as opposed to a balanced investment decision.
It is also worth noting that the most successful property investors are able to put their hands up and admit when they got it wrong. They simply sell these assets, take a loss and move onto the next opportunity. Profits in any investment market are difficult to come by but losses, well, they can very quickly snowball with one loss taking out all of your recent profits. Keep a level head, retain your investments if the long-term situation is unchanged but do not let your heart rule your head and don’t let your ego influence you!
Quite simply, you can’t deal on yesterday’s prices so don’t even take them into consideration.