Property Business: The Four 'S' Of Building A Property Business.
/The most important part of any journey is simply to start!
With the year already into its second phase, for existing investors, this could mean expanding your portfolio at a rapid rate to take advantage of new opportunities and positive buying conditions.
According to SevenCapital when it comes to building a property portfolio either as an existing investor who wants to scale up or as a new investor, it’s often easier to digest by splitting the journey into stages…
Let’s take a look at them:
Start: the most important part of any journey is simply to start. This is the stage where you carry out your research and preparation into what and where your first property is going to be, what type of investor you are and what does and doesn’t work for you.
It also includes preparing for things that will go wrong so that if they do and you need to stump up an unexpected amount of cash (for example on maintenance costs in a rental property), you’re already covered.
Scale: this stage is all about safety and is not a stage to rush through. Here is where you’ve established your first property investment and got it up and running and you’re ready to start to reinvest. You should know by now what your strategy is for the next few stages and how you might diversify your portfolio to get to your goal number of properties – it is vital to have a goal to work towards otherwise you could easily follow a road to nowhere. Research is key, don’t just look for the best deal at any given time – you need to make sure each property is right for you and fits into your long-term plan.
Sustain: this stage is all about management to make your property investments work hard for you. How do you want to run and manage your properties? Do you want to take control personally? Or are you a hands-off investor, in which case you’ll want a management company to handle things day-to-day on your behalf – which, of course, means factoring in a fee. This stage also includes a review of your finances – what loans you have in place, your income versus your outgoings. Doing a regular review of this can pay dividends. You want to make sure you’re getting the best rates and aren’t paying over the odds.
Sell: This final stage is very much dependent on your goals. Selling might not be part of your plan, but if it is then you want to make sure that your property’s value has reached a healthy return. Historically, holding and maintaining a property for between 15 to 20 years has seen its value double – this is why it’s not about timing the market, but time in the market. You also need to consider the size of your portfolio at this point and the taxes involved in selling your properties. If not considered carefully, these can come as a hefty blow to your profits. The key is always in the planning. Goodluck!
At Studio 19Twelve, we’re on hand to help you when you decide to start, scale, sustain or sell. Simply take a glimpse at what we can do by navigating through our website or contact us on the button below!
Enfield project.
Penthouse project.