What Every Clever Property Investor Has That You Should Have Too
Posted by : Premraj | Posted on : Wednesday, January 7, 2015
DELICIOUS
SU
REDDITProperty investment is one of the more easy ways to start building your wealth up and to develop your lifestyle. You don’t have to worry about acquiring a huge amount of knowledge to be a great success in property investment, and many people can do very well without any formal training like a degree or diploma. For individuals to buy and invest effectively they have to learn as much as they can about the investment side of things and about borrowing, and after that there has to be sufficient research done on the property you want to buy. You also need to put together a plan and have some guidelines set up for your investments. After this point, it’s simply a matter of putting your plan into place and monitoring it to guarantee that your plan of investment is working for you.
Lots of people who are investors get stuck in the trap of only purchasing one or two investment properties. This is because they don’t have a sufficient buffer or system in place to support them and guide them as they continue to invest. A system for investment doesn’t have to be super sophisticated – you just have to ensure that you know what you want to buy, when you want to buy it and how you’re going to continue to be able to invest. Checking out something like Homestart first home owners page is a great place to start if you want to find the best home buyer’s or investors information.
So why do you need a buffer when you invest? How about we set the scene for an example… You have three investment properties and someone living in each. One day you get a call from your property manager to say that your renter has been laid off at work and wont have the capacity to pay rent for a couple of weeks – perhaps up to several months. You just figure that everything is going to be alright after all – you’ve got enough to squeak by in this particular instance, and they’re going to pay it back in the long run. So no problem. Yet then, that same week there’s an a second call to say that the second tenant of yours needs to move out immediately, and your property manager suggests dropping the rent by ten dollars just to fill the place asap. Now things are a little tight…
And yes, of course, exactly one week from then you get a third call, yet this time it’s from your occupant in the third property, and the hall carpets are so frayed that they’re beginning to shred, so when will you be coming to replace them? Alright. At this point things are looking somewhat unpleasant. Three hits in one fortnight, and all this without any warning – all unplanned stuff. Furthermore you just know that this kind of thing would only happen over Christmas when you’re totally stretched as it is.
Thankfully you had your buffer set up, and you could take on the majority of the expenses instantly. You also get the carpet replaced straight away and then tenant is very happy with you.
In the event that you have a buffer set up you won’t see the surprising things that happen as issues, simply things you’ve effectively anticipated monetarily, regardless of the fact that they were sudden at the time. Your cash buffer is going to secure you against events like repairs, empty occupancy periods, breakages, investment rate climbs, upkeep and other unforeseen things that happen. Keep your investments safe if you’re going to take the time to invest, and make sure you always have a buffer in place.
