The reality is that if you want to buy a property every day of the week there will be one for sale. Whether all of them will be suitable for your portfolio, fit in with your financials and end up creating a profit is a whole different matter. So, should you really be focusing on quality over quantity when it comes to property investment?
How many properties can you manage?
It will obviously depend upon whether you are a property company, individual investor or perhaps a group of investors. It will also come down to experience as to what volume of properties you can manage in regards to rental and finalising purchases/sales. There is also the option of taking up the services of a property service company who will manage your properties on your behalf for a fee. The option you take will depend upon your specific situation, strengths and weaknesses and plans going forward.
Don’t overstretch your finances
The most obvious subject to discuss when looking at property investment is finances and whether you are in danger of overstretching them. In a perfect world it would make sense to engineer a degree of “headroom” between your financial liabilities, income and assets. This ensures that in the event of unforeseen issues, such as loss of a tenant, property damage, etc this would not necessarily be the end of your property investment career.
Those who stretch their finances to the limit, buy additional properties before sales are completed and have far too much open exposure are often asking for trouble. As you build up your rental portfolio, this will create a powerful income stream which can be used for further investment once you have repaid finance on individual properties. There is also the option of remortgaging buy to let properties especially in light of near historic low interest rates.
The hare and the tortoise
While we often mock the story of the hare and the tortoise, it does perfectly illustrate how sometimes it pays to take a step back and not rush forward. This is exactly the same when it comes to property investment, take your time, build up income streams and nurture your asset base while keeping a long-term plan in mind. It is important to have a long-term plan in place because unless you know where you are going to, how do you know when you have arrived?
It is also easy to make snap decisions in light of economic turmoil which may well reduce your long-term profit while protecting your short-term exposure. Unless the long term situation has changed with your property investments, is there really a need to sell? Also, if the market was to improve fairly quickly, there would be additional costs in not only selling but buying back into property. Always bear these in mind!
It is certainly a case of quality over quantity when it comes to property investment and long-term asset appreciation/income streams. There is nothing wrong in taking a short-term profit, and never will be, but if you go in with a long-term approach then in a worst-case scenario you will still be on track. Also, do not play mind games, trying to fit a square investment into a round hole. What do we mean by this?
If an investment opportunity does not fit with your investment strategy, finances and skills-set, take a step back and reconsider whether it is actually for you. Stick to what you know, maximise your strengths and bring in third parties to address any weaknesses. Successful business people surround themselves with intelligent people, often more intelligent than themselves, so property investors with a big ego may need to eat some humble pie every now and again.