Education Centre

Fail to Plan...Plan to Fail...

Hi there

Welcome to our new website.

This website is a prime example of what effective and specific planning can achieve.  When we first bought the business we needed a website but didn't know the facets of good web design and therefor as a result had a website that wasn't up to the standard that our business prides itself on.

When we interviewed web designers this time round, we had a very specific brief of what we wanted to achieve with our site.  We had done our homework and learned a little about internet marketing and basic design.  The web designer we chose, took our brief, shared his own expert knowledge with us and in turn has created a site that reflects our unique approach to how we manage our business.

An Investment plan is the most important part of your investing.

So you've decided you want to start investing in property.  Congratulations, that's a wise decision.  What now?

Firstly you need to know the difference between an investment strategy and an investment plan.

An Investment strategy is the method by which you will be investing?  ie.  Selection criteria, returns and finance.

An Investment Plan is an all-encompassing outline of your investment goals and how you plan to achieve them.

An Investment Plan should include:

Goals

Why are you investing?  What do you want to achieve?  How long are you giving yourself to achieve these goals?

Time Management

How much time can you spend on each element of the process?  Be specific - eg. 1 day a month to viewing property/attending auctions, 1 hour a night looking on the net, 1 hour every Monday calling Agents about their latest listings etc.

Strategy

What is your strategy?  Are you investing for capital/income or for tax advantages?  What type of property are you looking for?  Are you going to specialise in a specific type of property?  How often will you buy?  How often will you sell?  How long will you be holding the properties?

Professional Management

Who are the professionals you'll be using?  Accountants, Solicitors, Quantity Surveryors, Handymen, Buyers Assistants, Agents, Property Managers.  How much will you be doing yourself?  How much will you be out-sourcing.  It's important to value your time.  Just because you can do something, doesn't mean you should.  Should you miss out on a good buy because you've wasted your time trying to save a dollar on a service that you could have outsourced?  Your time is valuable.  Start thinking this way, and it will keep your eye on the ball.

Money Management

Where will you be distributing your income from property?  Will you be re-investing a portion in other asset classes?  Will you put a bit towards commercial property?  Will you be replacing your income with a portion of it?  Will you be topping up your super?

Review

How often will you review your plan?  How often will you review your finances?

These are just a few of the topics you should cover in an investment plan.  The advantage of having a plan is that when you make mistakes, it's easier to track them and review them and see where you went wrong.  Make your plan as specific as possible.  Don't leave any room for personal opinions or deviations.  

Professional stock traders have a quote that translates just as well to property:

"Plan the Trade, Trade the Plan".

It means, spend some time educating yourself.  Lay down your plan as specifically and as logically as possible.  Don't leave room for emotions to take over and distract you from your goals.  Then go and do it.  Stick to the plan.  

As you acquire more knowledge, you should periodically review your plan, tweak it and make it your own.  

You will learn a million methods from a million gurus, and will find an element of gold from each of them, but when it comes to investing of any kind, one size doesn't fit all.  You need to find a strategy that suits you.  Make it your own and trust it completely and maintain the discipline to not deviate from it and you will see results that only the top 10% of investors achieve. 

There's no secret to successful investing.  There's so much information out there, all you need to do is digest it and run it through your personal filter.  Work out what you want to achieve and soon it will become apparent which methods will help you get there.