Repositioning your property portfolio

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Even though property investment should be seen as a long-term commitment there are moments when you will need to reposition your portfolio to take account of the prevailing economic environment. While some investors who like to take more risk will literally buy and sell their portfolios as quickly as possible when economic environments change, the vast majority will only switch part of their long-term portfolio.

So, how would you reposition your property portfolio in the event of economic swings and forecasts for the future?

Never wrong to take profit

Before we even begin to look at how you may reposition your property portfolio going forward, it is worth noting that it is never wrong to take a profit. While many of us have fallen into the trap of taking profits too early, and often running our losses when unable to admit defeat, how can it be wrong to bank a profit?

So, if you see economic headwinds in the short to medium term then why not reduce your exposure to these specific markets and bank some profit. Many experienced investors will increase their cash liquidity in the event of an economic downturn so that they have funds available as and when the market recovers. You should always keep one eye on the longer term but there may be options to reduce your exposure in the short term and bring in some better value property investments going forward.

Make a decision and stick to it

In a perfect world we would all like to buy property at the bottom of the market and sell at the top to bank the greatest profit. Unfortunately the vast majority of us will never live this dream therefore once you make a decision to buy or sell property you need to stick to it. You made the decision for a reason, but timing will never be perfect, so if you are certain in your mind then you should go for it. If you are reducing your exposure to a specific country or a specific niche property market then don’t forget that you are not selling up, you are simply increasing your liquidity and reducing your short-term exposure.

It may well be that as and when economies improve you simply invest back into the markets which you had reduced your exposure to. Nothing should ever be off the table when looking at property investment, keep emotions to one side and look at the cold hard facts and figures and forecasts for the future.

Monitoring your investments

You should monitor your investments on an ongoing basis and perhaps carry out six monthly reviews to see exactly where you stand. As you gain greater experience in the boom and bust periods of the UK property market you will begin to get a feeling about the short to medium-term outlook. This may see you increasing your exposure in one area or reducing your investments and increasing your liquidity. It is also very sensible to review the balance of your portfolio, are you more exposed to one particular country or one particular area? Should you be looking to rebalance your exposure going forward?

Passive investment in the worldwide property market can prove to be extremely lucrative but there is nothing wrong in adjusting your portfolio as you go along.

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One Response to “Repositioning your property portfolio”

  1. Yes true there is needed to reposition your portfolio to create fast cash flow to enable you to finance your property portfolio acquisitions. Reposition your property portfolio in the event of economic swings is very well explained by Nicholas.

    Reply

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