According to some experts there’s money to be made- today’s undervalued properties offer bargains of a lifetime. Others insist there’s money to be lost -today’s real estate market is poised for a bigger drop. Throughout history fortunes have been made in real estate over the long term - whatever the short-term market does. Conversely, during the exact same time periods fortunes have been lost. So, is it the best of times? Or is it the worst of times to invest in rental properties? How’s an investor to know?
Not surprisingly to answer that question you need to think of real estate investment as a business venture and take a long-range perspective. Because your investment goals, your time frame, and your game plan to achieve your goals will determine whether or not it’s a good time to invest.
The steps are simple: First - Define your goal: what exactly are you trying to achieve? Second - Delineate your time frame: Where do you want to be in five years – in ten? Third - Develop your game plan: What steps will you take to achieve your goal?
And to be successful your long-term strategy should include:
· Making informed and focused investment choices
· Choosing optimum locations
· Targeting your customers
· Establishing your niche and competitive edge
· Planning for cyclical changes
That means watch the market. If you buy when there’s a need for more rentals, and then the cycle changes and there are more buyers and fewer renters, then it may be a good time to sell into the rising market.
It’s key to have a well-defined plan and stick to it. If you do, then whether the market is on the rise or on the downturn you’ll prove the naysayers wrong.
Next time we’ll be looking at key strategies in buying rental properties. We’d love to hear what’s worked for you!
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