As a buy to let investor, it’s important to understand the different types of buy to let properties and the pros and cons of each. You may be more attracted to some than others, but before you finalise your decision, it’s important to think about what you want to achieve. Of course you want your buy to let investment to be profitable. But how much money do you want to make exactly? When do you want to make it by? Only by considering precisely what you want to happen can you hope to achieve it.
This means clearly defining your goals, objectives, strategies and tactics. Each step helps you achieve the one before it and is a more specific step towards getting what you want out of your investment properties.
It’s easy to fall into the trap of thinking this kind of planning isn’t necessary. Setting goals is for people who have trouble staying organised, or maybe struggle with motivation. But this is not the case. Each and every one of the most successful investors works from clearly defined plans. Would you want to start a company without a business plan? Neither would we. And the same is true for investing.
The first step is to decide what it is you want specifically. These are your goals. And refining them into clearly defined milestones makes them objectives. But it’s not only about how much money you want to make. You might also ask yourself:
1. How much money can you afford to invest?
2. When would you like to make the money by?
3. How much risk is acceptable to meet your objectives?
4. Are you more interested in building a slow and steady income?
5. Or are you looking for a faster lump sum return?
By answering these questions, you make your buy to let endeavours considerably easier and a lot more profitable. Defining goals allows you to:
Narrow down your property search
There are a lot of properties out there. Rather than searching the internet erratically without a clear purpose, an investment strategy immediately narrows down the pool of viable properties, saving you a great deal of time.
Remain focused and avoid missing opportunities
Now that you’ve narrowed down the search results, you can crunch the numbers on properties you know are relevant. It’s likely there will still be many, and it can become tedious without a narrowed set of results. Get burned out, and it’s easy to inadvertently skip over a highly profitable opportunity.
Build a roadmap around which to form strategies
There are many strategies and tactics to make money in property investing. You can use leverage, aim for high yields, buy in the path of progress to later sell and much more. With that done, you can confidently choose strategies that align with your specific goals.
Whatever way you look at it, defining your investment objectives is the most important stage of the entire process.
Here at Martin & Co, we offer a service to suit you, and help you make your property your business. We know that Landlords vary enormously in their experience, portfolio size and the extent to which they want to be involved in the day-to-day management of their property. Our service starts with finding your first tenant and extends right up to the UK-wide management of a whole portfolio.
We can help advise you, arrange finance or just find you a tenant. For more details why not contact your local Martin & Co branch.
With thanks to Mark Mackay from Prime Asset Investments