If you want to successfully invest in property, your decisions should never be spur of the moment or driven by emotion.
If you operate this way, when the excitement of a new acquisition fades, you may realise your decisions were impractical.
Like any other business, and property investment is a business, you need to plan – and that means having a strategy.
And a financial strategy is at the heart of investing in anything, property included.
Don’t be tempted to follow the herd. Remember: 90 per cent of property investors don’t get past the first or second property. Why? Because they rely on savings or cash flow to get ahead, whereas I recommend a capital growth strategy. It takes patience and planning, but reaps rewards.
Of course cash flow is important to keep you moving, but residential property is a high-growth, relatively low-yield investment, so a capital growth strategy is what will last the distance.
This means building up a solid asset base over several property cycles, gradually lowering your loan-to-value ratios, so over time you can live off the cash cow you have created.
Hang on to good investments, reinvest, and accumulate capital gains. A winning strategy.