Patience is a virtue in the world of property investment

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While there are many potential dangers in any investment market one of the most common in the property world is patience or should we say impatience. The fact that deals often take some time to complete, there can be some fairly hefty paperwork and very often buyers and sellers will move the goalposts can prove frustrating and sometimes annoying. So, hands up if you have ever bought a property in haste and repented at leisure?

Do the right deal at the right price

It would be wrong to say flexibility is not required in the property market but you always need to remain focused on your endgame. There may be times when you can acquire a property which fits perfectly with your investment strategy maybe just a few percent higher than what you deem to be fair value. If the additional investment is fairly small then is it so wrong to acquire a perfectly fitting property for your investment portfolio? The simple answer is no as long as there is still significant upside based upon your forecasts for the future.

On the other hand we have seen many occasions where property investors were looking at a particular asset but not willing to pay the price at the time. Negotiations began, emails and telephone calls were exchanged but the sides were just too far apart. However, you would be surprised to learn how many people actually finally bag their “dream property” sometime later in line with the price they were originally willing to pay. So, deals can come to you if you wait long enough.

Trading your portfolio

How many property investors have in the past got “itchy fingers” because they had not traded for some time? Do you sometimes find yourself fitting new investment strategies around a property when in reality it should be the other way around? There is always a temptation to trade your portfolio more, to jump aboard the next hot spot and bank the profit on those who have held for some time. However, is this really the right course of action?

There will come a time when it is sensible to sell one or more of your property assets but not necessarily reinvest the funds immediately. The current environment is perhaps a perfect example with interest rates extremely low and little return when holding funds on deposit. As a consequence there is always a temptation to jump back into the property market as soon as you have any funds available.

Focus, focus, focus

On a regular basis you should review your property assets to see whether each individual asset and the combination of all investments together reflect your underlying investment strategy. If you have a good mix of assets, a good spread of exposure and each of your properties still offers good value then why would you make any changes?

What you will find is that those looking to trade their property assets on a regular basis are more likely to bank a profit on their more successful investments rather than ditching some of their underperforming assets. This can lead to a situation where you cut your winners and you are running your losers in order to trade your funds. Does this make sense?

On the flipside of the coin there will be a time to jettison your underperforming assets even if you have to take a loss. Human nature dictates this is one of the hardest transactions to even consider never mind complete but once you learn to be cold, calculated and cut all emotional ties, it can prove to be extremely useful going forward.

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